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General Purpose - Encourages information sharing among financial institutions and Federal government law enforcement agencies to identify, prevent, and deter money laundering and terrorist activity.
Scope - FinCEN, on behalf of a requesting Federal law enforcement agency, may require a financial institution to search its records to determine whether it maintains or has maintained accounts for, or has engaged in transactions with, any specified individual, entity, or organization.
FinCEN has authority to request information from any financial institution defined in the BSA, notwithstanding that FinCEN has not yet extended BSA regulations to all such financial institutions .
Although all financial institutions should be on notice that FinCEN may contact them for information, such information requests, as a practical matter, will initially be made only to those financial institutions for which FinCEN possesses contact information
Generally speaking, financial institutions that already are subject to BSA reporting obligations such as the requirement to file suspicious activity reports.
Obligations upon receiving an information request:
Expeditiously search for such accounts or transactions with each individual, entity, or organization named in FinCEN's request.
Report matches back to FinCEN, rather than the requesting law enforcement agency
Only use information request to report matching information to FinCEN, to determine whether to establish or maintain an account or to engage in a transaction, or to assist the financial institution in complying with its anti-money laundering program
Current process satisfies CIP objectives (except for data match)
Only origination lenders need comply with CIP
Focused on anti-money laundering . Questions Treasury asked are instructive:
Do we conduct additional data gathering or follow other additional customer identification procedures concerning loan applicants based on applicant’s citizenship (e.g., if the applicant is from Yemen)?
Treasury’s Response - focused on anti-$$ laundering
What % of loan disbursements are made using individual check? What % of individual disbursement checks are delivered to the school?
What % of loan checks are made copayable to the borrower and the school?
When sending disbursements to a school via EFT the first time (i.e., for a new school customer), are steps taken to verify that the school account is actually owned by the school? Do we periodically verify the school account information?
Do we monitor early large prepayments and the source of prepayment? E.g., Foreign wires?
“ Established business relationship”exception – Cannot stop telemarketing calls when consumer has established business relationship with company on whose behalf the call is made, unless consumer has asked to be on company-specific do-not-call list.
A relationship between a seller & a consumer based on:
… a financial transaction between the consumer and seller within 18 months immediately preceding the date of a telemarketing call, or
the consumer’s inquiry or application regarding a product or service offered by the seller, within the three (3) months immediately preceding the date of a telemarketing call.
Affiliates will fall within the exemption only to extent that the consumer would reasonably expect the affiliate to be included given the nature and type of goods or services offered and the identity of the affiliate.
The consumer’s expectations of receiving the call from the affiliate are the measure against which the breadth of the exemption must be judged.
Relevant Provisions for Student Lending Effective 3/31/03 :
Permits consumers who have put their numbers on the national “do-not call” registry to provide permission to call to any specific seller by an express written agreement
Telemarketers must disclose a variety of information, including identity of seller, that purpose of call is to sell goods or services, & nature of goods or services
Prohibits disclosing or receiving, for consideration, unencrypted consumer account numbers for use in telemarketing, except when the disclosure or receipt is to process a payment for goods or services or a charitable contribution pursuant to a transaction
Relevant Provisions for Student Lending Effective 3/31/03 :
Prohibits telemarketers from abandoning any outbound telephone call, and provides safe harbor from liability if telemarketer:
abandons no more than 3% of all calls answered by a person;
allows the telephone to ring for 15 seconds or 4 rings;
whenever a sales representative is unavailable within 2 seconds of a person’s answering the call, plays a recorded message stating the name and telephone number of the seller on whose behalf the call was placed; &
New Credit Bureau Requirements: Credit bureaus must offer consumers the ability to freeze their credit files and to "thaw" them with a special PIN (online or by phone) when they want to apply for credit themselves.
Lenders cannot check credit history on frozen account (absent consumer use of PIN to “thaw” account).
Resolve security alerts in credit report before funding a loan (i.e. credit report contains a clearly identifiable notification, consisting of more than a tradeline, that information in the report has been blocked as the result of an identity theft).
Must not lend money without taking reasonable steps to verify the consumer's identity and to confirm that the credit transaction is not the result of identity theft.
Provides that any person who uses a consumer credit report in connection with the approval of specified credit transactions may not extend credit or complete the transaction without taking reasonable steps to verify the applicant's identity.
The bill would also extend the existing private-sector ban on the public posting or display of Social Security numbers to state and local agencies.