Certain Property and Casualty Finance Contract Customers Now Exempt from CIP
On September 28, 2018, the federal banking agencies, including the Financial Crimes Enforcement Network and the National Credit Union Administration, issued a joint order exempting loans extended by financial institutions to facilitate purchases of property and casualty insurance policies from the Customer Identification Program (CIP) requirements of the Bank Secrecy Act. The reason for the exemption is that insurance premium finance lending presents a low risk of money laundering as it is not an effective way to transfer illicit funds. Financial institutions engaging in premium finance lending must still comply with all other requirements of the Bank Secrecy Act, including filing suspicious activity reports.
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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