FinCEN Issues Customer Due Diligence Rules
On May 6, 2016, the Financial Crimes Enforcement Network (FinCEN) issued the long awaited changes to the Bank Secrecy Act pertaining to customer due diligence (CDD) requirements.
FinCEN began laying the ground work for these changes back in 2012 by issuing an advance notice of proposed rulemaking.
The new rules require covered financial institutions to identify and verify the identity of beneficial owners of customers/members each time a new account is opened. The financial institution may rely on copies of identity documents supplied by the customer/member, as long as it believes the information is reliable.
The rules also require anti-money laundering programs to explicitly include risk-based procedures for conducting ongoing CDD and developing a customer/member risk profile.
Compliance with the new rule is not required until May 11, 2018.
CLA’s financial institution regulatory compliance team assists banks and credit unions nationwide in establishing regulatory compliance programs, conducting compliance testing, and training staff on regulations. Justin Robinson is a member of CLA’s regulatory compliance team and can be reached at justin.robinson@CLAconnect.com.
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