Title 12 — Banks and BankingRelease 119-73not60
§4642 Reporting of Fraudulent Loans
Title 12 › Chapter 46— GOVERNMENT SPONSORED ENTERPRISES › Subchapter III— ENFORCEMENT PROVISIONS › § 4642
Summary
The Director must require a regulated entity to quickly report when it finds or suspects it bought or sold a fraudulent loan or other financial instrument. The Director must also make sure each regulated entity has procedures to find those bad transactions. If a regulated entity or an affiliated person reports in good faith, they cannot be held liable under federal, state, or contract law for making the report or for not telling the people named.
Full Legal Text
Title 12, §4642
Banks and Banking — Source: USLM XML via OLRC
(a)The Director shall require a regulated entity to submit to the Director a timely report upon discovery by the regulated entity that it has purchased or sold a fraudulent loan or financial instrument, or suspects a possible fraud relating to the purchase or sale of any loan or financial instrument. The Director shall require each regulated entity to establish and maintain procedures designed to discover any such transactions.
(b)Any regulated entity that, in good faith, makes a report pursuant to subsection (a), and any entity-affiliated party, that, in good faith, makes or requires another to make any such report, shall not be liable to any person under any provision of law or regulation, any constitution, law, or regulation of any State or political subdivision of any State, or under any contract or other legally enforceable agreement (including any arbitration agreement) for such report or for any failure to provide notice of such report to the person who is the subject of such report or any other persons identified in the report.
Reference
Citations & Metadata
Citation
12 U.S.C. § 4642
Title 12 — Banks and Banking
Last Updated
Apr 3, 2026
Release point: 119-73not60