Title 12, Banks and BankingRelease 119-110

§4642 Reporting of Fraudulent Loans

Title 12 › CHAPTER 46 — GOVERNMENT SPONSORED ENTERPRISES › SUBCHAPTER III — ENFORCEMENT PROVISIONS › § 4642

Last updated Sep 22, 2026|Official source

Summary

The Director must require regulated companies to quickly tell the Director if they find they bought or sold a fake loan or financial instrument, or if they suspect fraud in those kinds of deals. Each company must have and keep rules and processes to find these bad transactions. If a company or a person connected to it makes such a report in good faith, they cannot be sued or held legally responsible under federal or state law, or under any contract or arbitration agreement, for making the report or for not telling the person named in the report or others.

Full Legal Text

Title 12, §4642

Banks and Banking, Source: USLM XML via OLRC

(a)Requirement to report

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)Protection from liability for reports

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

Sep 22, 2026

Release point: 119-110