QUESTION
As a non-bank
residential mortgage lender and originator, I know that our company is now
required to file SARs with FinCEN, but are we also subject to the information
sharing and disclosure provisions of Sections 314(a) and (b) of the USA PATRIOT
Act?
ANSWER
Yes as to
both 314(a) and (b).
The plain
language of the regulation (31 CFR §1029.500) states that “[l]oan or finance
companies are subject to the special information sharing procedures to deter
money laundering and terrorist activity requirements set forth and cross
referenced in [subpart E of part 1029],” which, in turn, makes reference to the
general regulations implementing 314(a) and (b) contained in 31 CFR §1010,
subpart E. Accordingly, RMLOs are
specifically subject to the information sharing provisions of 314(a) and (b).
However,
as a practical matter, unless a financial institution receives a 314(a) request
from FinCEN requiring it to search for and disclose records, they have no obligation
under the 314(a) rule. And, although not required to do so, RMLOs can participate
in protected information sharing under 314(b) by completing and submitting the
electronic information form on the FinCEN site (http://www.fincen.gov/statutes_regs/patriot/section314b.html) and selecting “Other” for the “Primary Federal Regulator” field.
Brennan T.
Holland
Director/Legal
& Regulatory Compliance
Lenders Compliance Group
