Non-bank mortgage lenders are preparing for new anti-money laundering (AML) rules that will take effect soon. The Financial Crimes Enforcement Network (FinCEN) has proposed new rules that would require non-bank mortgage lenders to implement AML programs to prevent money laundering and terrorist financing.
What Are the New AML Rules?
The new AML rules proposed by FinCEN would require non-bank mortgage lenders to implement four key components of an AML program:
- A designated AML compliance officer
- A written AML program
- Customer due diligence (CDD) procedures
- Ongoing monitoring of customers and transactions
These requirements are similar to those already in place for banks and other financial institutions. The proposed rules would also require non-bank mortgage lenders to report suspicious activity to FinCEN.
Why Are the New AML Rules Being Proposed?
The new AML rules are being proposed to address concerns about money laundering and terrorist financing in the mortgage industry. Non-bank mortgage lenders are not currently subject to the same AML requirements as banks and other financial institutions, which has made them vulnerable to exploitation by criminals and terrorists.
In recent years, there have been several high-profile cases of non-bank mortgage lenders being used to launder money or finance terrorist activities. The new AML rules are intended to prevent these types of abuses and protect the integrity of the mortgage industry.
How Are Non-Bank Mortgage Lenders Preparing for the New AML Rules?
Non-bank mortgage lenders are taking several steps to prepare for the new AML rules. Many lenders are hiring AML compliance officers and implementing written AML programs. They are also conducting CDD on their customers and monitoring transactions more closely.
In addition, non-bank mortgage lenders are working with industry groups and regulators to ensure that they understand the new AML requirements and are able to comply with them.
What Are the Potential Consequences of Non-Compliance with the New AML Rules?
Non-compliance with the new AML rules could have serious consequences for non-bank mortgage lenders. FinCEN has the authority to impose civil penalties for AML violations, which could be as high as $100,000 per violation. In addition, non-compliance could damage a lender’s reputation and lead to loss of business.
Conclusion
Non-bank mortgage lenders are taking the new AML rules proposed by FinCEN very seriously. They are implementing AML programs and working to ensure compliance with the new requirements. The new rules are intended to protect the integrity of the mortgage industry and prevent money laundering and terrorist financing. Non-bank mortgage lenders that fail to comply with the new AML rules could face serious consequences.