In our AML/CFT Membership Group, Kevin discussed AML/CFT risk associated with residential real estate lending and how loan officers are key players in the process. If you think about it, the majority of any CIP/CDD and EDD information will be gathered and evaluated by your lenders and mortgage loan officers and not your BSA/AML oriented staff. Thus, it is important that your training and procedures for lenders emphasize:
- Customer Information Program (CIP)
That all loans are treated as “accounts” under CIP regulations and relevant documentation needs to be evaluated for potential red flags and suspicious activity.
- Customer Due Diligence (CDD)
This includes more than just determining the ability to repay the credit. Customer information, sufficient to establish a customer risk profile, needs to be collected for all loans. This includes borrowers, guarantors, signatories, and principals, as applicable.
- Enhanced Due Diligence (EDD
Training should clearly outline risk-based triggers for EDD, such as:
- Foreign nationals or offshore entities;
- Unusual sources of collateral or income; and,
- Loans secured by assets in high-risk jurisdictions.
In the video, Kevin touches on this more in the video:
2025/10/08
