SAR Filing – Customer Sold Loan Collateral
Answer by John Burnett, BOL Guru Guru Bios
Question: We were recently informed that one of our loan customers sold the collateral on a loan we made to him. What information should we get, or what do we need to consider before filing a SAR?
Answer: One major consideration might be whether the customer intended to defraud the bank through the sale of the collateral. For example, it's one thing to sell a herd of cattle and repay the loan for which they were held as collateral. It's something entirely different to sell the herd and fail to satisfy the loan or substitute collateral to the lender's satisfaction.
Find out the rest of the story. If the bank or any other lender was defrauded or put in jeopardy of not being repaid as a result of the sale of collateral, and if it was another lender, the funds traveled through your bank, you should consider filing a SAR.
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