[Barb]

I’m referring to question 12 of the FinCen FAQs – I’d like clarification of what a loan “renewal” is. Is it using the same loan number and just modifying the maturity date, etc. or is it a renewal of an existing loan but completely new documents and a new loan number?

Topic

[kmeade]

I have always been told when you have a new note you have a new loan, even if you keep the same loan number.

[susan costonis]

Additional clarification of a loan “renewal” has been requested from FinCEN. Most regulators have agreed that a new note is a new loan (for HMDA reporting purposes). FinCEN should be releasing new BSA Exam Procedures for Beneficial Ownership and CDD (they have not indicated a release date, but you can sign-up for FinCEN notifications). Pending further clarification, these are some possible steps:
1. Check with YOUR primary regulator for guidance.
2. Contact FinCEN directly and ask for guidance.
3. Establish procedures for loan renewal that would include asking for certification that the previous beneficial ownership information is “accurate and up-to-date” (as stated in FAQ #12).
4. Consider implementing an agreement that the customer will notify you of any change in beneficial ownership information (as state in FAQ #12).

[Author]

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