PART 1029—RULES FOR LOAN OR FINANCE COMPANIES Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 and 5316-5332; title III, sec. 314 Pub. L. 107-56, 115 Stat. 307. Source: 77 FR 8157, Feb. 14, 2012, unless otherwise noted. Subpart A—Definitions § 1029.100 Definitions. Refer to § 1010.100 of this Chapter for general definitions not noted herein. Subpart B—Programs § 1029.200 General. Loan or finance companies are subject to the program requirements set forth and cross referenced in this subpart. Loan or finance companies should also refer to subpart B of part 1010 of this chapter for program requirements contained in that subpart which apply to loan or finance companies. § 1029.210 Anti-money laundering programs for loan or finance companies. (a) Anti-money laundering program requirements for loan or finance companies. (b) Minimum requirements. (1) Incorporate policies, procedures, and internal controls based upon the loan or finance company's assessment of the money laundering and terrorist financing risks associated with its products and services. Policies, procedures, and internal controls developed and implemented by a loan or finance company under this section shall include provisions for complying with the applicable requirements of subchapter II of chapter 53 of title 31, United States Code and this part, integrating the company's agents and brokers into its anti-money laundering program, and obtaining all relevant customer-related information necessary for an effective anti-money laundering program. (2) Designate a compliance officer who will be responsible for ensuring that: (i) The anti-money laundering program is implemented effectively, including monitoring compliance by the company's agents and brokers with their obligations under the program; (ii) The anti-money laundering program is updated as necessary; and (iii) Appropriate persons are educated and trained in accordance with paragraph (b)(3) of this section. (3) Provide for on-going training of appropriate persons concerning their responsibilities under the 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. (4) Provide for independent testing to monitor and maintain an adequate program, including testing to determine compliance of the company's agents and brokers with their obligations under the program. The scope and frequency of the testing shall be commensurate with the risks posed by the company's products and services. Such testing may be conducted by a third party or by any officer or employee of the loan or finance company, other than the person designated in paragraph (b)(2) of this section. (c) Compliance. (d) Compliance date. Subpart C—Reports Required To Be Made by Loan or Finance Companies § 1029.300 General. Loan or finance companies are subject to the reporting requirements set forth and cross referenced in this subpart. Loan or finance companies should also refer to subpart C of part 1010 of this chapter for reporting requirements contained in that subpart which apply to loan or finance companies. §§ 1029.310-1029.315 [Reserved] § 1029.320 Reports by loan or finance companies of suspicious transactions. (a) General. (2) A transaction requires reporting under this section if it is conducted or attempted by, at, or through a loan or finance company, it involves or aggregates funds or other assets of at least $5,000, and the loan or finance company knows, suspects, or has reason to suspect that the transaction (or a pattern of transactions of which the transaction is a part): (i) Involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any Federal law or regulation or to avoid any transaction reporting requirement under Federal law or regulation; (ii) Is designed, whether through structuring or other means, to evade any requirements of this part or any other regulations promulgated under the Bank Secrecy Act, Public Law 91-508, as amended, codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5314, 5316-5332; (iii) Has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the loan or finance company knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction; or (iv) Involves use of the loan or finance company to facilitate criminal activity. (3) More than one loan or finance company may have an obligation to report the same transaction under this section, and other financial institutions may have separate obligations to report suspicious activity with respect to the same transaction pursuant to other provisions of this part. In those instances, no more than one report is required to be filed by the loan or finance company(s) and other financial institution(s) involved in the transaction, provided that the report filed contains all relevant facts, including the name of each financial institution involved in the transaction, the report complies with all instructions applicable to joint filings, and each institution maintains a copy of the report filed, along with any supporting documentation. (b) Filing and notification procedures What to file. (2) Where to file. (3) When to file. (4) Mandatory notification to law enforcement. (5) Voluntary notification to FinCEN. (c) Retention of records. (d) Confidentiality of SARs. (1) Prohibition on disclosures by loan or finance companies General rule. (ii) Rules of construction. (A) The disclosure by a loan or finance company, or any director, officer, employee, or agent of a loan or finance company of: ( 1 ( 2 (B) The sharing by a loan or finance company, or any director, officer, employee, or agent of the loan or finance company, of a SAR, or any information that would reveal the existence of a SAR, within the loan or finance company's corporate organizational structure for purposes consistent with Title II of the Bank Secrecy Act as determined by regulation or in guidance. (2) Prohibition on disclosures by government authorities. (e) Limitation on liability. (f) Compliance. (g) Compliance date. § 1029.330 Reports relating to currency in excess of $10,000 received in a trade or business. Refer to § 1010.330 of this chapter for rules regarding the filing of reports relating to currency in excess of $10,000 received by loan or finance companies. Subpart D—Records Required To Be Maintained By Loan or Finance Companies § 1029.400 General. Loan or finance companies are subject to the recordkeeping requirements set forth and cross referenced in this subpart. Loan or finance companies should also refer to subpart D of part 1010 of this chapter for recordkeeping requirements contained in that subpart which apply to loan or finance companies. Subpart E—Special Information Sharing Procedures To Deter Money Laundering and Terrorist Activity § 1029.500 General. Loan or finance companies are subject to the special information sharing procedures to deter money laundering and terrorist activity requirements set forth and cross referenced in this subpart. Loan or finance companies should also refer to subpart E of part 1010 of this chapter for special information sharing procedures to deter money laundering and terrorist activity contained in that subpart which apply to loan or finance companies. § 1029.520 Special information sharing procedures to deter money laundering and terrorist activity for loan or finance companies. (a) Refer to § 1010.520 of this chapter. (b) [Reserved] § 1029.530 [Reserved] § 1029.540 Voluntary information sharing among financial institutions. (a) Refer to § 1010.540 of this chapter. (b) [Reserved] Subpart F—Special Standards of Diligence; Prohibitions, and Special Measures for Loan or Finance Companies §§ 1029.600-1029.670 [Reserved]