New Regulation Requires GSEs to File Suspicious Activity Reports with FinCEN
February 25, 2014
The Financial Crimes Enforcement Network (FinCEN) finalized anti-money laundering (AML) regulations requiring the government sponsored enterprises to develop programs for the prevention of money laundering and to file suspicious activity reports (SARs) with FinCEN. The final rule adopts, without significant change, all of the regulatory provisions contained in FinCEN’s November 2011 Notice of Proposed Rulemaking. The rule requires Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks to file SARs directly with FinCEN instead of the current practice of filing less detailed reports through their regulator, the Federal Housing Finance Agency (FHFA). This will provide law enforcement and regulators with a more complete and timely national picture of suspected mortgage fraud and money laundering, as well as assist with investigations and prosecutions of significant mortgage fraud schemes. FinCEN closely coordinated this rulemaking with the FHFA, to which FinCEN is delegating responsibility for examining the GSEs for compliance with the regulations. This rule is effective 60 days after publication in the Federal Register. The compliance date is 180 days after publication in the Federal Register.