WASHINGTON (CN) – Freddie Mac, Fannie Mae and other government enterprises that provide financing for the residential mortgage market must adopt anti-money laundering precautions, according to new rules proposed by the Financial Crimes Enforcement Network.
At a minimum, the entities have to develop internal policies, procedures and controls to deter and detect suspect transactions; designate a compliance officer; provide ongoing employee training; and create an independent audit function to test their programs.
The hallmark of these programs is the Suspicious Activity Report (SAR) which the Financial Crimes Enforcement Network (FinCEN) standardized for use by most financial institutions. A SAR is required for any transaction a regulated entity believes to be suspicious. “Suspicious transaction” is defined by each entity’s chief regulator.
Freddie and Fannie currently report all transaction data to their chief regulator, the Federal Housing Finance Administrator, which then files SARs with FinCEN as it sees fit.
Under the proposed rules, Freddie and Fannie will file SARs directly with FinCEN as do other financial institutions subject to SAR filing regulations.
Click the document icon for this regulation and others.