Lending to Legal Entity Customers

BSA examiners are digging deeper and asking more questions about lending to legal entity customers. Could a BSA examiner find loan fraud that was missed by your institution’s due diligence process? Does your institution have a system for identifying false statements and identity theft attempts on loan applications? Do your lenders know these activities may require filing a suspicious activity report? Is your process for documenting beneficial ownership effective? This program will address the four core elements of the CDD (Customer Due Diligence) Rules.

Commercial lenders are also required to follow several core lending regulations. Key disclosure requirements will be included in this session. Which regulations apply to commercial loans? What if a loan is secured by real estate? Are there exceptions when real estate is taken as “an abundance of caution”? Can examiners assess civil money penalties for violations?

Topics

What are five reasons to conduct BSA training for Commercial Lenders?
What are some of the BSA “red flags” and risk factors in commercial lending?
What types of due diligence questions should you ask legal entity loan applicants for BSA compliance?
Steps for BSA due diligence throughout the life of the loan.
Review of how to comply with the four core elements of the CDD (Customer Due Diligence) Rules that include:
- Customer Identification and verification
- Beneficial Ownership identification and verification of a “legal entity”
- Understand the nature and purpose of customer relationships to develop a customer risk profile
- Ongoing monitoring for suspicious transactions, and, on a risk basis, maintaining and updating customer information.
Overview of commercial loan compliance hot spots, including fair housing, Regulation B, Flood Disaster Protection Act, Fair Credit Reporting Act, accommodation loans, HMDA, and insider lending