AML Policy Tips for Mortgage Brokers

As of August 13, 2012, mortgage brokers have been required to comply with the same anti-money laundering (AML) rules as mortgage lenders. Mortgage brokers fall under the Financial Crimes Enforcement Network’s (FinCEN) definition of a “loan or finance company.” FinCEN, Department of the Treasury, 31 CFR, Part 1029.210 states, “Each loan or finance company shall develop and implement a written anti-money laundering program that is reasonably designed to prevent the loan or finance company from being used to facilitate money laundering or the financing of terrorist activities.” At a minimum, the policy must:

• Incorporate policies, procedures, and internal controls based on the risks associated with the products and services offered by the mortgage broker.
• Designate a compliance officer to oversee, implement, and update the policy as needed.
• Ensure on-going training for appropriate personnel.
• Provide for independent testing to monitor and maintain an adequate program.

Simply having a policy on file with the name of the company on it is not good enough. The policy should be tailored to the individual company and should be suited to the size and complexity of the company’s mortgage operation. Keep in mind that independent testing should be conducted on a frequency that is consistent with the company’s risk level.

During an examination, the Department will review the company’s AML policy, as well as any previous policies that were in effect during the scope of the exam. Examiners will ensure the policies and procedures are adequate and followed by the company. They will review training logs and notes to make sure appropriate personnel are being adequately trained. Lastly, the Department will ensure that independent testing is conducted as prescribed in the policy.