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Question:  As a residential mortgage lender and/or broker, what are my company’s Anti-Money Laundering (AML) training requirements?

Answer:  The Bank Secrecy Act (BSA), which requires mortgage lenders and brokers to maintain an AML program, indicates that persons/entities subject to the BSA must:

“[p]rovide for on-going training of appropriate persons concerning their responsibilities under the [AML] program. A loan or finance company may satisfy this requirement with respect to its employees, agents, and brokers by directly training such persons or verifying that such persons have received training by a competent third party with respect to the products and services offered by the loan or finance company.”

The Multistate Mortgage Committee Examination Manual – BSA/AML Program Examination Procedures (Exam Manual) provides insight on what state regulators will consider effective AML ongoing training for employees.  Specifically, the Exam Manual indicates:

“Training should include all applicable regulatory requirements and the company’s BSA/AML Program policies, procedures, and controls. At a minimum, the [mortgage lender’s/mortgage broker’s] training program must provide training for all personnel whose duties require knowledge of the BSA/AML Program. An effective training program should be tailored to the specific responsibilities of personnel. … Existing employees should receive training at least annually and new employees should receive appropriate training within a reasonable period after joining the company. The training program should reinforce the importance of the BSA/AML Program and ensure that all employees understand their role in maintaining an effective Program.”

The Exam Manual also highlights the importance of adequate training for the AML Compliance Officer and for the Board of Directors and/or Executive Management in their leadership roles.

Although neither the BSA nor Exam Manual indicate a specific period of time in which employees must complete AML training after hire, best practice is for all employees to complete this training within 30 days of hire. It is possible for any employee to encounter suspicious or illegal activity at any time. Employees must understand their responsibilities under the AML program and how to handle and internally report/escalate suspicious situations.

Mortgage lenders/brokers must also maintain adequate records of all AML training. This includes, but is not limited to:

• Training materials/content;
• Testing materials and scores; and
• Attendance records including relevant dates of training (i.e. assigned date, completed date, due date).