FinCEN wants nonbank mortgage lenders to report suspicious activity

The Financial Crimes Enforcement Network proposed a new requirement that would force nonbank residential mortgage lenders to establish anti-money laundering programs and file suspicious activity reports, or SARs. Currently, the only mortgage originators required to file SARs are banks. The new proposal would require mortgage brokers and lenders not affiliated with a bank to comply as well. FinCEN said SARs are critical sources for investigating and prosecuting mortgage-fraud schemes. FinCEN also said the new regulations would be consistent with due diligence operations already in place at the companies. “These lenders and originators generally deal directly with consumers. As important mortgage finance providers, they are ideally positioned to assess and identify money laundering risks and possible mortgage fraud. This protects both their business interests and their customers from the abuses of fraud and financial crime,” FinCEN Director James Freis Jr. said. Even more rules regarding AML and SAR could be coming from the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, otherwise known as the SAFE Act. That law requires the development of a nationwide licensing system and registry for some in the mortgage space. Write to Jon Prior.