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FinCEN adopts new anti-money laundering and fraud rules for the GSEs

New rule puts onus on reporting suspicions to FinCEN, not FHFA

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The Financial Crimes Enforcement Network on Thursday finalized anti-money laundering regulations that will require the housing government-sponsored enterprises to develop programs for the prevention of money laundering and to file suspicious activity reports with FinCEN.

This final rule adopts, without significant change, all of the regulatory provisions contained in FinCEN’s November 2011 “Notice of Proposed Rulemaking.”

The final rule requires that the GSEs – Fannie Mae, Freddie Mac, and the 12 federal home-loan banks – file suspicious activity reports directly with FinCEN instead of the current practice of filing less detailed reports through their regulator, the Federal Housing Finance Agency.

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 Housing GSEs for compliance with the regulations.

This rule is effective 60 days after publication in the Federal Register.

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