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Loans & OFAC Hits

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Under OFAC, if our loan officers are checking loan applicants for OFAC hits, and find one, are we required to decline the loan at that point? If so, what are the procedures we should follow? I find very little about lending with respect to this particular law. If we decline the loan in this case, how do we word the decline, and would it be included on the AA notice or done separately?

From the OFAC FAQ
Q) If a loan meets underwriting standards but is a true "hit" on the OFAC list, what do we use as a denial reason on the adverse action notice?

A) If you have confirmed with OFAC that you have a "good hit," there is no reason not to explain that to the customer. The customer can contact OFAC directly for further information.]

First published on 10/28/02

First published on 10/28/2002

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