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Components of a Compliant AML Program – Part II: AML Training

August 29, 2019 BY MQMR Blogger

As we continue the series focusing on the annual audits lenders should perform, today’s spotlight is on the required training components of a compliant AML/BSA program. A core element of an effective AML Program is the ongoing training of employees.  Specifically, the Bank Secrecy Act requires mortgage lenders to “provide for ongoing training of appropriate persons concerning their responsibilities under the [AML] program”. This is an often insufficiently performed BSA requirement. Mortgage companies must train their personnel at least annually in all applicable aspects of AML regulations. A best practice for lenders is to provide AML training to all new employees within 30 days of hire.

 

Additionally, the BSA/AML compliance officer must receive periodic training that is relevant and appropriate given any changes to regulatory requirements.  All AML training needs to be adequately tailored to a company’s operational activities and overall AML risk profile. Mortgage companies should specifically train their personnel on the types of suspicious activity and “red flags” they are likely to encounter, such as mortgage fraud related items. Prevalent examples include: occupancy fraud, income fraud, appraisal fraud, employment fraud, liability fraud, social security number fraud and other identity theft indications. Employees should also be given clear instruction as to how to report such suspicious activity (i.e. provide a time frame for reporting and contact information for the AML Compliance Officer). 

 

Finally, mortgage companies must document their training programs by maintaining training and testing materials, the dates of training sessions and attendance records. Lenders that are not conducting this annual training should do so immediately.