Private lenders run the loan-boarding framework against the origination-to-servicing cycle on each new loan. Seven recurring identity-verification mistakes run against the lender’s framework on the boarding cycle. Each runs the lender into a regulatory, wire-fraud, or secondary-market framework against the loan portfolio. This article walks the seven mistakes and runs the corrective framework against each.

1. Drivers license is the only identity document on file

The drivers-license-only framework runs the identity-verification framework on a thin discipline against the Customer Identification Program framework. The framework runs the four CIP data elements against the document framework but runs against the entity-authority framework, the FinCEN Beneficial Ownership Information framework, and the OFAC sanctions-screening framework on a thin discipline. The corrective runs the ten-document framework against each new loan on the boarding cycle.

2. No FinCEN BOI report on the entity borrower

The entity-borrower framework runs the FinCEN Beneficial Ownership Information rule under the Corporate Transparency Act framework. The lender that runs the loan-boarding framework against an entity borrower without the BOI framework runs a regulatory-exposure framework against the lender’s framework. The corrective runs the BOI verification framework against each natural-person beneficial owner on the entity-borrower cycle.

3. No OFAC sanctions screening on the boarding cycle

The OFAC sanctions-screening framework runs the Specially Designated Nationals and Blocked Persons List framework against each natural person and each entity. The lender that runs the loan-boarding framework on no OFAC framework runs a wire-blocking and a regulatory-exposure framework against the lender. The corrective runs the OFAC framework against each borrower, each entity, and each beneficial owner on the boarding cycle.

4. No corporate resolution or operating agreement on file

The entity-authority framework runs the signer-authority verification framework against the entity borrower. The lender that runs the loan-document-execution framework on no corporate resolution, no manager resolution, no partnership consent, or no trustee certification runs a signer-authority framework on a thin discipline. The corrective runs the entity-authority-documentation framework against the entity borrower on the boarding cycle.

5. Form W-9 missing or unsigned

The Form W-9 framework runs the taxpayer-identification-number framework against the United States borrower on the IRS framework. The lender that runs the loan-boarding framework on a missing or unsigned Form W-9 runs the IRS Form 1098 reporting framework on a thin discipline and runs the backup-withholding framework against the borrower on a TIN-matching-failure cycle. The corrective runs the Form W-9 collection framework against each borrower on the boarding cycle.

6. No IRS TIN matching on the borrower

The IRS TIN-matching framework runs the borrower’s name and taxpayer-identification number against the IRS framework. The lender that runs the loan-boarding framework on no TIN-matching framework runs the Form 1098 reporting framework on a TIN-matching-error framework on the year-end reporting cycle. The corrective runs the TIN-matching framework against each borrower on the boarding cycle.

7. No audit trail on the verification steps

The audit-trail framework runs the verification-recordkeeping framework against the loan-boarding cycle. The lender that runs the verification framework on no audit-trail framework runs the regulatory-recordkeeping framework on a thin discipline. The corrective runs the audit-trail framework against the verification-document framework, the verification-method framework, the verification-date framework, the verification-officer framework, and the exception-and-escalation framework on the lender’s servicing platform.

Related Topics

This article is educational and does not constitute legal, regulatory, or tax advice. The identity-verification framework runs against the Bank Secrecy Act framework. The framework runs against the USA PATRIOT Act §326 Customer Identification Program framework. The framework runs against the Corporate Transparency Act beneficial-ownership framework. The framework runs against the OFAC sanctions-screening framework and the IRS framework on the lender’s recurring compliance cycle. Consult qualified legal counsel and a tax adviser on the specific identity-verification framework against any private-lending operation.

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