BSA & OFAC - Loans Purchased From Another FI

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Question:

We buy loans from another institution and that institution retains the servicing obligation. Do the borrowers become our customers for BSA and OFAC purposes? This is basically a general ledger transaction.

Answer:

BSA: Specifically, CIP exempts purchased loans. I'm not sure what other aspects of BSA would need to be considered.

OFAC: All transactions are subject to OFAC, even a purchased loan. If this customer was on the OFAC list you would not want to purchase the loan or have anything to do with them.

First published on BankersOnline.com 3/20/06