I learned recently some rather extraordinary news: my firm is currently the only mortgage risk management firm in the country offering testing of a Residential Mortgage Lenders and Originator's (RMLO's) Anti-Money Laundering Program. This situation struck me as exceedingly odd, inasmuch as testing is a statutory requirement.

  

  

Testing annually is recommended, but not later than every eighteen months. In this first year, most companies are testing prior to the Financial Crimes and Enforcement Network's (FinCEN's)statute's anniversary date in August. An audit of the procedures detailed in an RMLO's policy and procedures must be conducted either an internal auditor, in accordance with FinCEN guidelines, or, in accordance with FinCEN guidelines, by an independent external auditor.

  

How is it that we are the first mortgage risk management firm to offer the independent auditing requirement? Maybe, even at this late date, the industry itself is still trying to absorb the AML compliance implementation, while struggling to integrate a multitude of other new regulations.

  

In this article, I will offer some of the basics to AML testing for RMLOs, so that you have a high-level set of bullets that may offer some insight into the audit process. There are many moving features to such an audit. In constructing your own procedures, be aware that the time to learn about how to properly test and report audit results is most certainly not during an examination.

  

Best wishes,
Jonathan

 

� 2006-2013 Lenders Compliance Group, Inc. All Rights Reserved.