n The Financial Crimes Enforcement Network (FinCEN) issued an administrative ruling to clarify currency transaction report (CTR) filing requirements for financial institutions when making Bank Secrecy Act reports of transactions involving sole proprietorships and transactions involving sole proprietorships and other legal entities operating under a DBA (doing business as) name.
When filing a CTR involving a sole proprietorship, financial institutions are required to complete only one section A, listing the name of the sole proprietorship’s owner, DBA name, the owner’s Social Security number, home address, date of birth and occupation. Only one section A needs to be filled out even if the business has a different address or tax identification number than its owner.
The ruling, FIN-2008-R001, replaces ruling FIN-2006-R003. FinCEN said it will continue to accept CTRs with two completed section A’s, containing information on both the sole proprietorship and its owner, in accordance with the ruling in FIN-2006-R003.
The ruling is available at www.fincen.gov.
n FinCEN issued interpretive guidance to clarify how rules implementing section 312 of the USA Patriot Act (the correspondent account rule) apply to a covered financial institution presenting a negotiable instrument for payment to another financial institution.
The guidance addresses whether the presentation of a negotiable instrument for payment by a covered financial institution to a foreign financial institution on which the instrument is drawn would establish a correspondent account between the covered financial institution and the paying institution, subjecting the covered financial institution to compliance with the due diligence provisions of the correspondent account rule.
The guidance is available at www.fincen.gov.
n The Federal Reserve Board amended the asset-size exemption threshold for depository institutions that are required to report data under Regulation C, the Home Mortgage Disclosure Act (HMDA). Institutions with assets of $37 million or less as of Dec. 31, 2007, are not required to collect HMDA data in 2008. The previous threshold was $36 million. The amended regulation is available at www.occ.treas.gov/fr/fedregister/72fr72234.pdf.
n The Small Business Administration (SBA) is working to improve its lender oversight practices and maximize lending program efficiency. To protect the agency from potential fraud, SBA’s Office of Credit Risk Management (OCRM) checks to ensure that lenders have adequate internal controls to help detect and counter potential fraud. Additional opportunities—such as examining data anomalies, mining third-party databases, random sampling of loans for further review, and identifying and sharing fraud detection best practices—are being explored to identify suspicious lending patterns indicative of fraud.
A lender monitoring and risk management system has been developed with highly predictive lender risk ratings, the agency said. The GAO and SBA’s Office of Inspector General have recognized the SBA as conforming to private sector industry best practices for portfolio and risk management.