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Thursday, October 10, 2013

Anti-Money Laundering Program–Requirements

QUESTION 
I am the Anti-Money Laundering Program officer. I want to know three things: what are the required sections of the program, how to determine the core procedures that need to be in the program, and what are my responsibilities as the AML officer?

ANSWER 
There are four elements to the Anti-Money Laundering Program (“AML”) required by the Financial Crimes Enforcement Network (“FinCEN”). 

These are:
1. Policy and Procedures
2. AML Compliance Officer
3. Training
4. Independent Testing

In order to determine the core procedures that an organization requires, it is necessary to assess its size, complexity, and risk profile, with respect to exposure to money laundering activity and terrorist financing schemes. Generally, the policy statement should contain actionable and measurable implementations in accordance with the Bank Secrecy Act (“BSA”). For instance, if the residential mortgage lender or originator obtains its loan applications not only through a retail channel but also through a wholesale or correspondent channel, or any other channel, its agents, brokers, or any similarly situated entity, must be included in the operational structure of its AML compliance requirements. Methodologies for reviewing all internal and agent relationships for compliance with the AML guidelines are part of the AML program.

The AML officer’s responsibilities are considerable. The primary responsibility is to oversee the implementation of the AML program. To accomplish this, the AML officer monitors compliance with AML guidelines in all loan origination channels as well as internally among employees, promptly updating and ratifying the program, when required, implementing training initiatives, and ensuring that independent testing is effectuated. Additionally, the AML officer’s oversight includes taking actions to assure that Safe Harbor guidelines are always followed.

Jonathan Foxx
President & Managing Director
Lenders Compliance Group