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Kentucky Governor signs new mortgage lending law

National Mortgage Professional
Apr 28, 2008

OCC issues new guidance on telemarketing relationshipsMortgagePress.comrisk management, telemarketers, due diligence, underwriting On April 24, the Office of the Comptroller of the Currency (OCC) issued risk management guidance to national banks for due diligence, underwriting and monitoring of entities that process payments for telemarketers and other merchant clients. Pursuant to the guidance, banks must control risk in the accounts of payment processors through due diligence and underwriting, as well as monitoring these high-risk accounts for high levels of unauthorized returns and for suspicious or unusual patterns of activity. Banks must implement a due diligence and underwriting policy that, among other things, requires an initial background check of the processor and its underlying merchants to support the validity of processors' and merchants' businesses, their creditworthiness, and business practices. Banks must also engage in fraud monitoring. These procedures are particularly important in cases in which telemarketing payment processors deposit remotely created checks (RCCs) in their accounts. To ensure effective risk management, banks that initiate transactions for processors should require the processor to provide information on their merchant clients, such as the merchant's name, principal business activity and geographic location. Banks should verify directly, or through the processor, that the originator of the payment is operating a legitimate business. Finally, the guidance provides that banks are expected to comply with Bank Secrecy Act/Anti-Money Laundering (BSA/AML) policies and procedures to monitor and identify unusual activity. For a copy of this guidance, please see www.occ.treas.gov/ftp/bulletin/2008-12.html. For more information, visit www.occ.treas.gov.
Published
Apr 28, 2008
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