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Anti-Money Laundering Program - Testing

September 12, 2013
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This notification is a Compliance Alert.


Please read through it in its entirety.


If you have not already made the appropriate arrangements to implement a test of your Anti-Money Laundering Program (AML), we urge you to take immediate action.


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Our schedule for the anti-money laundering audit is nearly full, though there are a few dates still available. After any open dates are taken, we will not schedule additional tests until October.


Testing annually is recommended. After the first audit - which should have been conducted by August 13, 2013 - and depending on those findings, it may be possible to implement an audit not later than eighteen months from the initial audit date. The frequency of subsequent audit periods is based on each prior period's findings. 


An audit of the procedures detailed in a non-bank's policy and procedures must be conducted either internally, in accordance with FinCEN guidelines, or, in accordance with FinCEN guidelines, by an independent, external auditor entirely independent of the BSA Officer and internal compliance staff.

The results of the audit must be reported to the audit committee of the Residential Mortgage Lender and Originator's (RMLO's) management and the BSA Officer. 


It is the responsibility of the BSA Officer to take appropriate action to correct any problems found as a result of the audit and promptly respond to the RMLO's audit committee. 

Anti-Money Laundering Program Test

The AML Program test should consist of:
  • Audit responses to Prior Year Consulting and Regulatory Examination Reports, if applicable.
  • Issue and Review Document Request.
  • Conduct Anti-Money Laundering (AML) Risk Assessment.
  • Review:
    • AML Compliance Program Oversight.
    • Customer Identification Program Oversight.
    • Suspicious Activity Reporting (SAR) Policies and Procedures.
    • Suspicious Activity Monitoring Systems.
    • Transactional Testing, consisting of a sample of filed Suspicious Activity Reports (SARs) in order to determine completeness. 
    • Information Sharing Practices under Section 314(a) and 314(b) of the USA PATRIOT Act.
    • Reporting of Cash Payments Over $10,000 (FinCEN Form 8300), if applicable.
    • Report of Foreign Bank and Financial Accounts (IRS Form TD F 90-22.1), if applicable.
    • Report of International Transportation of Currency or Monetary Instruments (FinCEN Form 105), if applicable.
  • Issue an Audit Report containing Executive Summary, Findings, and Recommendations. 
  • Exit Interview.
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LENDERS COMPLIANCE GROUP is the first full-service, mortgage risk management firm in the United States specializing exclusively in outsourced mortgage compliance and offering a full suite of services in residential mortgage banking for banks and non-banks.

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This communication is sent to our valued clients, colleagues, and subscribers, who regularly receive our Mortgage Compliance Updates, Compliance Alerts, Commentaries, Articles and White Papers. These publications are free to subscribers. Information contained herein is not intended to be and is not a source of legal advice.


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