Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 68

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 68
---
 regulations require financial institutions, among other duties, to institute and maintain
effective anti-money laundering programs and file suspicious activity and currency transaction reports as appropriate. The federal Financial
Crimes Enforcement Network, established by the U.S. Treasury Department to administer the Bank Secrecy Act, is authorized to impose significant
civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with the individual
federal banking regulators, as well as the U.S. Department of Justice, Drug Enforcement Administration and Internal Revenue Service,
or the “IRS.” There is also increased scrutiny of compliance with the rules enforced by the Office of Foreign Assets Control.
Federal and state bank regulators also have begun to focus on compliance with Bank Secrecy Act and anti-money laundering regulations.
If our policies, procedures and systems are deemed deficient or the policies, procedures and systems of the financial institutions that
we have already acquired or may acquire in the future are deficient, we would be subject to liability, including fines and regulatory
actions such as restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain
aspects of our business plan, including our acquisition plans, which would negatively impact our business, financial condition and results
of operations. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have
serious reputational consequences for us.

48

Federal,
state and local consumer lending laws restrict our ability to originate certain mortgage loans and increase our risk of liability with
respect to such loans and increase our cost of doing business.

Federal, state and local
laws have been adopted that are intended to eliminate certain lending practices considered “predatory.” These laws prohibit
practices such as steering borrowers away from more affordable products, selling unnecessary insurance to borrowers, repeatedly refinancing
loans and making loans without a reasonable expectation that the borrowers will be able to repay the loans irrespective of the value
of the underlying property. Over the course of 2013, the CFPB issued several rules on mortgage lending, notably a rule requiring all
home mortgage lenders to determine a borrower’s ability to repay the loan. Loans with certain terms and conditions and that otherwise
meet the definition of a “qualified mortgage” may be protected from liability to a borrower for failing to make the necessary
determinations. In response to these laws and related CFPB rules, we have tightened, and in the future may further tighten, our mortgage
loan underwriting standards to determine borrowers’ ability to repay. Although it is our