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What is OFAC and Who Must Comply

On Behalf of | Feb 8, 2023 | Consumer Protection

The Office of Foreign Assets Control is a financial intelligence and enforcement agency of the U.S. Department of the Treasury.   OFAC publishes a list of people and companies that are operating as terrorists, drug traffickers, or under the control of a targeted country.  Essentially, they are enemies of the state, and OFAC does not want these people or companies participating in the benefits of the American economy.

The issue commonly comes up in a credit application.  Because we don’t want terrorists being able to borrow money from American banks, the credit bureaus have adopted measures to assure these banks are warned.  The credit bureaus use a screening software to determine if an applicant is on an OFAC sanctions list.  If there is a potential match, the credit bureaus will place an alert on the report.  It will be a “red flag” to the lender that this person should not be dealt with.

OFAC has instructed lenders not to just outright deny the loan because of a potential match.  Mistakes are made, and the lender should assure that the match is correct.  There is an OFAC Hotline to call to verify the report.  However, the knee jerk reaction of the bank is to send the person away.  This leaves many innocent people unfairly without access to financial resources.  Credit bureaus should not be mixing individuals up on a terrorist list.  It is certainly an error, and they have been taken to court numerous times for the error.

If you find yourself on an OFAC list where you do not belong, contact SmithMarco, P.C. for a completely free case review.