Do we need to perform an OFAC check on the party selling the vehicle on a private party loan? I am not familiar with the OFAC issues when it comes to loans. Thank you to anyone that can steer me in the right direction.

Do you mean the person your customer is purchasing the car from? If you would be issuing payment to that party, then it wouldn't hurt to check them, just like you would on a wire or cashier's check payee.

Thank you. Yes I did mean the person that the customer is purchasing the vehicle from. You are saying it wouldn't hurt to check them, but is it mandatory?

From the OFAC website FAQs:

"Who must comply with OFAC regulations?

All U.S. persons must comply with OFAC regulations, including all U.S. citizens and permanent resident aliens regardless of where they are located, all persons and entities within the United States, all U.S. incorporated entities and their foreign branches. In the cases of certain programs, such as those regarding Cuba and North Korea, all foreign subsidiaries owned or controlled by U.S. companies also must comply. Certain programs also require foreign persons in possession of U.S. origin goods to comply. [09-10-02]"

I think you will find that banks take a risk-based approach to how far down the line they check OFAC. Certainly on all primary relationships, but some banks do not check payees and some do. It is risk-based.