Mortgage Companies: Rising Pressure for AML & BSA Compliance

In recent years, the regulatory pressure on mortgage companies to implement robust Anti-Money Laundering (AML) programs has significantly increased. Federal agencies and state regulators are keen on ensuring mortgage companies' efforts to combat illicit financial activities.

The Importance of AML Programs in the Mortgage Industry

AML and BSA compliance play a crucial role in preventing, detecting, and reporting potential money laundering activities within financial institutions. They safeguard the integrity of the financial system and protect institutions from exploitation by criminals. For mortgage companies, effective AML programs help identify suspicious transactions, such as overvalued properties and unusual financing arrangements, preventing money laundering activities and unwittingly facilitating financial crime.

Regulatory AML and BSA compliance Expectations

Regulators expect mortgage companies to have tailored AML policies and procedures that address specific risks. Designating an AML officer responsible for overseeing the program is essential. Moreover, mortgage companies are expected to comply with Know Your Customer (KYC), Bank Secrecy Act (BSA), Office of Foreign Assets Control (OFAC), and customer due diligence requirements. These regulations involve verifying customers' identities, reporting specific transactions, and conducting due diligence to prevent involvement in illicit activities.

Resources for Compliance

Mortgage companies seeking to enhance their AML programs can access valuable resources, including guidance from the Financial Crimes Enforcement Network (FinCEN) and the Nationwide Multistate Licensing System (NMLS). The American Bankers Association (ABA) offers various AML compliance resources, such as training programs and webinars. Strengthen your AML program with these helpful tools.

1. The Financial Crimes Enforcement Network (FinCEN): FinCEN provides guidance on AML compliance for non-bank financial institutions, including mortgage companies. You can find more information on their website.

2. The Nationwide Multistate Licensing System (NMLS): The NMLS has a comprehensive guidebook that provides information on various regulatory requirements for mortgage companies, including AML. You can access the guidebook here.

3. The American Bankers Association (ABA): The ABA offers a range of resources on AML compliance, including training programs and webinars. More information can be found on their website.