FinCEN Issues FAQs on Customer Due Diligence Rules
On April 3rd, the Financial Crimes Enforcement Network (FinCEN) issued Frequently Asked Questions (FAQs) on the new Customer Due Diligence (CDD) requirements going into effect May 11, 2018. 37 questions are posed and answered in the FAQ. Question #7 is of particular interest to financial institutions as it addresses a question that has been frequently posed to us:
Q: If an individual named as a beneficial owner of a new legal entity account is an existing customer/member of the financial institution, is the financial institution still required to identify and verify the identity of this individual or can it rely on the previously performed Customer Identification Process (CIP)?
A: It’s good news for financial institutions as FinCEN answered that the financial institution can rely on the previously obtained CIP information as long as it is up-to-date, accurate, and the legal entity’s customer/member representative certifies or confirms the accuracy of the pre-existing CIP information.
View the FinCEN CDD Guidance document for further explanation or view our webinar for an overview of the final rule.
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.
Comments are closed.