Fincen Plan Requires GSEs to Develop Anti-Money Laundering Procedures


A proposal from the Financial Crimes Enforcement Network would require Fannie Mae and Freddie Mac to develop their own anti-money laundering programs as part of an ongoing effort to combat mortgage fraud.

The proposal would also require the government sponsored enterprises, including the Federal Home Loan Banks, to file suspicious activity reports directly with Fincen. The GSEs currently file fraud reports with the Federal Housing Finance Agency, which then files SARs with Fincen when the facts in the particular fraud report warrant it, Fincen said in a press release Thursday.

“This action is another step to help restore the integrity of the mortgage market,” Fincen Director James H. Freis, Jr. said in the press release. “Providing law enforcement with quicker access to data about potential financial crimes will help them better hold illicit actors accountable for mortgage fraud and other scams.”

Fincen said it coordinated with FHFA in drafting the proposal, and said it expects the new AML and SARs programs can be effectively integrated into the GSEs’ existing anti-fraud policies. FHFA Acting Director Ed DeMarco said the rule is a positive step, and will help streamline the process and build on efforts to fight mortgage fraud.

Developing such programs will also allow directors, officers and employees of the GSEs to benefit from the Bank Secrecy Act’s safe harbor provisions, according to the press release. The comment period is open for 60 days.

Daily Briefing | Friday, November 4, 2011

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  • Genworth’s Loss Halved

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  • Redwood Sees Big Earnings Drop but Jumbo Production Spikes

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  • LPS Wins Court Battle Against FDIC in WaMu Appraisal Case

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  • Another Protest to Draw Attention to Foreclosure Impact

    The outcry against the financial sector has taken yet another turn, this time with a petition calling on the Minneapolis School Board to move its payroll and other accounts from Wells Fargo to a local community bank as a way to highlight the connection between foreclosures and local school systems.

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