WASHINGTON—As CUToday.info reported, compliance challenges are growing among lenders due to the Paycheck Protection Program.
Now, a report by Bloomberg asserts many lenders—particularly nonbank lenders—releasing funds to small businesses as a result of the CARES Act “face a substantial compliance burden: Establishing an anti-money-laundering program that will pass regulatory scrutiny.”
“Fulfilling that obligation may present challenges to nonbank lenders not familiar with the rigors of AML compliance,” stated Bloomberg.
Bloomberg pointed out the Small Business Administration’s interim final rule for the PPP requires that entities not currently subject to the requirements of the Bank Secrecy Act (BSA), “establish an anti-money laundering (AML) compliance program equivalent to that of a comparable federally regulated institution,” prior to engaging in PPP lending activities.
“Although the final rule is not explicit, that is likely to mean that participating lenders must have AML programs comparable to the ones maintained by financial institutions under the BSA,” Bloomberg stated.