On October 11, 2024, the mortgage sector — mortgage lenders, mortgage brokers and mortgage administrators — became reporting entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. For many private lenders, this was the first time anti-money-laundering obligations applied directly to them.
This is an overview. FINTRAC publishes detailed guidance for each obligation; use it, and your compliance officer, as the authority.
1. A compliance program
Every reporting entity needs a compliance program with:
- A compliance officer responsible for it.
- Written policies and procedures, kept up to date and approved.
- A documented risk assessment of your clients, products, delivery channels and geography.
- An ongoing training program for employees and agents.
- A two-year effectiveness review of the program.
2. Know your client
- Verify identity of clients using an accepted method, and record how and when it was done.
- For corporations and trusts, confirm and record beneficial ownership — the individuals who own or control 25% or more — and the steps taken to confirm it.
- Determine whether clients are politically exposed persons (PEPs) or heads of international organizations, and screen against sanctions lists.
- Keep a business relationship record and apply ongoing monitoring proportionate to risk.
3. Record keeping
Keep the required records — identification, beneficial ownership, large cash transactions, business relationships and more — generally for at least five years, in a form you can produce for an examiner quickly.
4. Reporting
Depending on what happens, reports may include:
- Suspicious transaction reports, when there are reasonable grounds to suspect money laundering or terrorist financing.
- Large cash transaction reports for $10,000 or more in cash received in a single transaction or within 24 hours.
- Terrorist property reports, and listed-person reporting where it applies.
Suspicious-transaction information is confidential: the client must not be told a report was made or is being considered.
Where private lenders struggle
- Identification records saved in email or personal folders.
- Corporate borrowers and lenders with no beneficial-ownership record.
- No evidence of screening or periodic review.
- No audit trail showing who did what.
How Amortivo helps
Amortivo keeps identification, beneficial ownership, screening, risk ratings and review dates with each client, flags corporations and trusts that still need an ownership record, restricts suspicious-transaction records to the compliance officer, and logs every change. Reports themselves are filed through FINTRAC’s systems. See compliance & FINTRAC.