Credit providers in the U.S. are prohibited from doing business with specially designated nationals (SDN), a list of people compiled by the United States Department of Treasury. This article will give you some background on Office of Foreign Assets Control (OFAC) compliance, walk through the steps of using OFAC InstaCheck in LoanPro, and explain what to do if you get a positive match.

Background

This is largely an outline of information from the Treasury Department. For more information, see their FAQ page.

Using OFAC InstaCheck in LoanPro

In LoanPro, you can run OFAC InstaCheck from any customer's page. You could either find them from a loan they're linked to, or find them directly through the customer manager. On that you can click OFAC InstaCheck directly on the Customer Tools or any customer.

Click 'InstaCheck', which brings up a window with the customer’s information. To run the test, click ‘Pull OFAC Report Now’.

You will see the results of the test in the bottom right of the window.  If your customer is on the SDN list, click the arrow next to “Did the applicant match OFAC database? See OFAC's processing steps." 

Once the OFAC InstaCheck has been completed, you should see a green checkmark on the Contact & Personal information tab for the customer.

Ongoing OFAC monitoring

In some cases, partner banks or compliance guidelines require regular, recurring OFAC checks after a loan has been originated. While it is rare to find a true positive match, it’s still necessary to complete these checks. For many lenders, this means pulling lists and manually scrubbing your customer base which locks up important resources. Using LoanPro’s native features and our integrated partners, this process can be customized and automated according to your unique processes. 

To set up this configuration, reach out to your LoanPro contact. They will help you evaluate your needs and create a plan to execute this solution. First, you’ll determine how often you would like to run an OFAC check on your active loans. Then, you’ll define criteria that will trigger the check. For example, you might want to check all loans in the “Open - Repaying” that are 30 days past their contract date. 

Once you’ve defined your completed your customization, the process generally looks like this:

1. When your chosen criteria is met, LoanPro will trigger automations that check the borrower against the required lists.
2. LoanPro will update custom fields, create a loan note, update the loan status, and enter the date this account was checked.
3. If there are any positive matches, LoanPro will alert the correct parties and an agent can use a Walkthrough to easily complete the next steps.
4. Finally, each month a detailed report will be generated and uploaded to the Report File Hub with the month’s OFAC check history.

Because this is a custom configuration, the process can be tweaked to meet your needs and adapt to your business logic. 

What to do if your OFAC InstaCheck results in a positive match

As LoanPro Software outlines & provides to you directly on the OFAC InstaCheck page, these are the following steps that you should follow if you have a positive match on the test:

Step 1

Is the hit or match against OFAC’s SDN list or targeted countries, or is it hitting for some other reason (i.e., Control List or PEP, CIA, Non-Cooperative Countries and Territories, Canadian Consolidated List (OSFI), World Bank Debarred Parties, Blocked Officials File, or government official of a designated country), or are you unable to determine the reason for the hit?

• If there is a positive match with OFAC’s SDN list or targeted countries list, continue to Step 2 below.
• If there is a positive match for some other reason, you should contact the agency that oversees the list where the match is coming from:
  • The Denied Persons List and the Entities List, please contact the Bureau of Industry and Security at the U.S. Department of Commerce at 202-482-4811.
  • The FBI’s Most Wanted List or any other FBI-issued watch list, please contact the Federal Bureau of
  • Investigation (http://www.fbi.gov/contact/fo/fo.htm).
  • The Debarred Parties list, please contact the Office of Defense Trade Controls at the U.S. Department of State, 202-663-2700.
  • The Bank Secrecy Act and the USA PATRIOT Act, please contact the Financial Crimes Enforcement Network (FinCEN), 1-800-949-2732.

Step 2

Now that you’ve established that the hit is against OFAC’s SDN list or targeted countries list, you must evaluate the quality of the hit. Compare the name of your customer with the name on the SDN list. Is the name of your customer an individual while the name on the SDN list is a vessel, organization or company (or vice-versa)?

• If yes, you do not have a valid match.*
• If no, please continue to 3 below.

Step 3

How much of the SDN’s name matches the name of your customer? Do just one of two or more names match (e.g., just the last name)?

• If yes, you do not have a valid match.*
• If no, please continue to 4 below.

Step 4

Compare the complete SDN entry with all of the information you have for your customer. An SDN entry often will have, for example, a full name, address, nationality, passport, tax ID or cédula number, place of birth, date of birth, former names and aliases. Are you missing a lot of this information for the customer?
If yes, go back and get more information and then compare your complete information against the SDN entry.

• If no, please continue to 5 below.

Step 5

1. Are there a number of similarities or exact matches?
2. If yes, please call the hotline at 1-800-540-6322.
3. If no, you do not have a valid match.