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#421220 - 09/12/05 05:02 PM MBA Conference and OFAC
Suwannee Offline
Platinum Poster
Joined: Jun 2002
Posts: 641
I attended the MBA Regulatory Compliance Conference in Washington, DC last week. We had representatives from the regulatory agencies that spoke. One rep from the OCC said that lenders and banks were not required to check their existing databases for people added to the SDN lists. He said that financial institutions were only required to make sure that they did not open any new accounts with people on these lists.

This information goes against everything I have learned regarding OFAC. I was always under the impression that financial institutions were prohibited from doing business with anyone on the SDN list, which meant that they had to verify whether their existing customers had been added to the list.

Anyone have ideas on this?
When you lose, don't lose the lesson.

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#421221 - 09/12/05 06:09 PM Re: MBA Conference and OFAC
Hrothgar Geiger Offline
10K Club
Hrothgar Geiger
Joined: Jun 2005
Posts: 10,395
Jersey Shore
It goes against my experiences with OFAC as well. I've always operated under a pretty literal interpretation of the Executive Order, and tend to think that paying interest or sweeping account balances into master accounts counts as 'doing business with.'

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#421222 - 09/12/05 07:15 PM Re: MBA Conference and OFAC
Ted Dreyer Offline
Diamond Poster
Ted Dreyer
Joined: Apr 2001
Posts: 2,245
It goes against the guidance in the BSA Exam Manual, which says at page 89: "In addition, banks should have policies, procedures and processes in place to check existing customers when there are additions or changes to the OFAC list."

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#421223 - 09/13/05 03:13 AM Re: MBA Conference and OFAC
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
Is this for Mortgage Bankers of America? Perhaps the thinking is that you don't need to re-check loans because, well - what are you going to block?

Then again, you would need to make sure you don't issue any refunds of overpayment to someone on OFAC. Polite show of hands - how many times has that actually happened to anyone?
Regulations are a poor substitute for ethics.
Just sayin'

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#421224 - 09/13/05 12:13 PM Re: MBA Conference and OFAC
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Banks are not required to check anything.

Suggest you contact the OCC rep and give him or her a chance to rephrase or recant. Bonnie's observation is good, the reference may have been limited to the particular audience; i.e. there is little practical value to reviewing loans consumated in the past against today's additions to the list.

Excuse me, I meant even less practical value than usual.
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

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