07/23/2023
Pertaining to large corporate secondary market participation / syndication loan questions: What time frames, waivers, or legal letters are reasonable / acceptable regarding BSA compliance, specifically, CIP and CDD Beneficial Ownership Forms, when purchasing a share of a large corporate (not consumer or mortgage loans) participation / syndication loan a few years after its origination (secondary market)?
For example: Purchasing a 3.7% share ($20 million) in an existing ($550 million originally) syndicated corporate (not consumer or mortgage loans) secured term loan for publicly traded and non-publicly traded corporations. The loans are purchased in the secondary market through attorneys and agented by global investment banks such as Credit Suisse Group AG. Some syndicated loans have more than 80 borrowers with more than 100 banks that participate in the loan. Further, our bank is not a Legal Bank of Record for the loan until our initial Funding Date (years after the loan originated) and therefore we cannot request and are not provided with any BSA required documentation such as Beneficial Ownership Forms, and CIP Documents for numerous borrowers, or non-BSA documentation such as Organization Documents, prior to the Funding Date. Typically, it takes 90+ days to receive Beneficial Ownership Forms, CIP information, etc., after the Funding Date, and in some instances, we aren’t provided with some requested documentation at all.
What are reasonable / acceptable timeframes for collection of Beneficial Ownership Forms, CIP, etc. that we can specify in our BSA Policy for these specific syndication loans? Is 90 – 180 days acceptable? If we specify a shorter timeframe we would constantly be up against the due dates, or past due, causing BSA policy exceptions / violations, which we want to avoid. Is it acceptable to obtain only the main borrower’s Beneficial Ownership Forms and CIP?
Alternatively, is it acceptable to create and utilize a standard legal letter signed / certified by the agent bank or attorney that managed the transaction stating that they have in their possession, and thoroughly reviewed for adherence to Regulatory Requirements, specific documents, and information, such as CIP for guarantors, Beneficial Ownership documents, or other BSA or Compliance related documents? Additionally, the legal letter would include a statement that they agree to provide documents or information should the need arise for audit or examination purposes or in the event of a triggering event when the bank would be required to complete enhanced due diligence. Would we be subject to regulatory criticism in either of those processes?
02/06/2022
What can we put down as the reason for denial on the Adverse Action Notice, for loans denied due to criminal subpoenas? Can we select "Other" and specify "BSA concerns"?
04/26/2020
Do we need a policy on providing payment extensions to borrowers?
04/12/2020
Customers see on the news that foreclosures and evictions have stopped and borrowers can skip payments. What should we tell them when they ask about this?
01/26/2020
I started in BSA a few years ago and I built an Enhance Due Diligence program for higher risk customers with monthly transaction review and then yearly comprehensive review of the business and its expected vs actual activity. At the time I found a really clear outline of expectations in the BSA Manual and now I can't find anything related to EDD at a all. Did this get removed? Anyone else experiencing this?
03/11/2018
If a SAR is submitted on the due date using an automated system is it considered to be on time or does it have to be accepted by FinCEN by the due date.
05/07/2017
At what point in the process do we start conducting due diligence on loans and does it differ between loan and deposit accounts?
04/30/2017
Does the Interagency Exam Manual for BSA include any training requirement for lenders?
02/05/2017
May a lender delay the processing of a home loan application because an applicant is on maternity/paternity leave?
08/21/2016
What does it mean to ensure my vendor is financially stable?