Dodd-Frank News Center

Definitions of transmittal of funds and funds transfer amended to comply with changes in EFTA

This story appeared in Bank Digest.

The Financial Crimes Enforcement Network and the Federal Reserve Board have issued a final rule amending the regulatory definitions of "funds transfer" and "transmittal of funds" under the regulations implementing the Bank Secrecy Act (BSA). The definitions are being amended to maintain their current scope in light of Dodd-Frank Act amendments to the Electronic Fund Transfer Act, which will avoid certain currently covered transactions being excluded from BSA requirements.

Customer Due Diligence Roundtable Announced

This story appeared in Bank Digest.

The Financial Crimes enforcement network has announced that it will host a roundtable discussion on Oct. 5, 2012, at the Financial Industry Regulatory Authority in New York, N.Y., to continue gathering information on its advance notice of proposed rulemaking on customer due diligence requirements for financial institutions. According to the agency, the proposal would consolidate and strengthen existing customer due diligence obligations and include a requirement that institutions identify beneficial ownership of all accounts.

Anti-Money Laundering Programs Required for Non-Bank Mortgage Lenders

This story appeared in Bank Digest.

The Financial Crimes Enforcement network has adopted a regulation that will require nonbank residential mortgage lenders and loan originators to establish anti-money laundering programs and report suspicious transactions. According to FinCEN, an analysis of Suspicious Activity Reports filed by banks has shown that independent mortgage lenders and brokers originated many of the mortgages that later were the subject of bank-filed SARs. FinCEN expects the regulations, which will take effect 180 days after they are published in the Federal Register, to significantly increase the number of mortgage-related SARs.

Mortgage Loan Fraud SAR Filings Up in 2010

This story appeared in Bank Digest.

The Mortgage Loan Fraud SAR Filings In Fourth Quarter and Calendar Year 2010, released by the Financial Crimes Enforcement Network shows the number of suspicious activity reports involving mortgage loan fraud increased 4 percent in 2010 to 70,472, compared with 67,507 in 2009. The report also shows that the growth rate of MLF SARs began to slow over the last two to three years.

 

FinCEN’s Freis Addresses Agency Role in Financial Reform

This story appeared in Bank Digest.

Financial Crimes Enforcement Network Director James H. Freis Jr. addressed how FinCEN might be “affected by the changes underway in the financial industry.” Freis delivered his remarks at the Institute of International Bankers 2010 Anti-Money Laundering Conference in New York, N.Y., on May 20, 2010. Freis stated, “We need to promote greater enterprise-wide risk management to protect international banks and help them get relevant information to appropriate authorities in the range of countries in which they are active.” He noted that, in a time of change, FinCEN “does not operate in a bubble.” Rather, it acts within the evolving framework of financial regulation in the United States and abroad.

FinCEN Warns on Home Equity Conversion Mortgage Fraud Schemes

This story appeared in Bank Digest.

The FinCEN has released new guidance, “Advisory to Financial Institutions on Filing Suspicious Activity Reports Regarding Home Equity Conversion Mortgage Fraud Schemes,“ to assist financial institutions in guarding against fraud schemes perpetrated against senior citizens who use the Federal Housing Administration's Home Equity Conversion Mortgage program, a form of reverse mortgage.

Guidance on TARP-Related SAR Filings Issued

This story appeared in Bank Digest.

The Financial Crimes Enforcement Network has published guidance intended to assist financial institutions in filing Suspicious Activity Reports on activities related to the Troubled Asset Relief Program. According to the agency, suspicious activities could include conflicts of interest, collusion, insider trading, advance fee schemes and money laundering. The advisory also gives information on how to complete a SAR.

FIN-2009-A006 at https://www.fincen.gov/statutes_regs/guidance/html/fin-2009-a006.html

Federal, State Officials Discuss Housing Anti-Fraud Efforts

This story appeared in Bank Digest.

Treasury Secretary Timothy Geithner, Attorney General Eric Holder, Housing and Urban Development Secretary Shaun Donovan, Federal Trade Commission Chairman Jon Leibowitz, Financial Crimes Enforcement Network Director Jim Freis and attorneys general from 12 states met on Sept. 17, 2009, to discuss emerging trends and proactive strategies to combat fraud against consumers in the housing markets as well as best practices to bolster coordination across state and federal agencies. The federal agencies have committed to coordinating information and resources across agencies to maximize targeting and efficiency in fraud investigations. This includes alerting financial institutions to emerging schemes, stepping up enforcement actions and educating consumers to help those in financial trouble avoid becoming the victims of a loan modification or foreclosure rescue scam.

FinCEN Outlines Step to Combat Loan Modification Fraud

This story appeared in Bank Digest.

Financial Crimes Enforcement Network (FinCEN) Director James H. Freis Jr. outlined steps that FinCEN is taking to combat persons attempting to defraud American homeowners through purported “mortgage modification” and “foreclosure relief” companies. “These predatory scams rob Americans of their savings and potentially their homes,” Freis stated in an address before the Cambridge International Symposium on Economic Crime. Freis noted that “it is important for law enforcement to be proactive in their investigative efforts, and it is just as critical that we think creatively to close loopholes on the regulatory side.” He stated that, “FinCEN will work to close loopholes that allow criminals to prey on innocent consumers. With those in the financial community, we will work to ensure they remain vigilant and share information so that industry can continue providing law enforcement with the lead information they need to aggressively root out fraud while promoting legitimate economic activity and growth. And we will also continue to challenge ourselves and our law enforcement partners to think creatively to identify new threats.”

Guidance Provided on Filing SARs Regarding Loan Modification/Foreclosure Rescue Scams

This story appeared in Bank Digest.

The Financial Crimes Enforcement Network has issued an advisory highlighting loan modification/foreclosure rescue scams so that financial institutions may better assist law enforcement when filing Suspicious Activity Reports (SARs). The advisory notes that the activities of financial institutions may intersect with loan modification/foreclosure rescue scams in two ways. First, persons or entities perpetrating the scams may seek the services of financial institutions for the purpose of receiving, depositing or moving funds relating to the scams. Second, financial institutions may become aware of such scams through their interactions with customers who have become victims. FinCEN is requesting that, if financial institutions become aware of this type of activity, they include the term "foreclosure rescue scam" in the narrative portions of all relevant SARs filed. It also requests that the Suspect/Subject Information Section of the Suspicious Activity Report include all information available for each party suspected of engaging in this fraudulent activity, including information such as individual or company name, address, phone number and any other identifying information.