BSA Program Requirements Could Now Apply to Your CUSO

The Financial Crimes Enforcement Network (FinCEN) recently issued a final rule that applies the Bank Secrecy Act (BSA) to non-bank residential mortgage lenders. Since 2002, loan and finance companies were specifically exempted from the obligation to have a BSA program. However, FinCEN has recently become concerned with the rising risk of non-bank residential lenders being used for money laundering and fraud.

If your credit union has a credit union service organization (CUSO) that provides loans secured by mortgages, the CUSO will need to develop a comprehensive BSA program. The effective date of the rule is April 16, with a mandatory compliance date of August 13, 2012. August 13 is not too far away when you consider what is involved in establishing a BSA program. Every program must include the following:

• Internal policies, procedures, and controls
• Designated compliance officer
• Ongoing training program
• Periodic independent testing

Note that non-bank residential mortgage lenders do not have to comply with the currency transaction reporting (CTR) requirements but they do have to comply with suspicious activity reporting (SAR) requirements.

Access the final rule.