WASHINGTON—The Financial Crimes Enforcement Network's (FinCEN) limited 90-day exemption to covered financial institutions from obligations under its customer due diligence (CDD) rule expires Friday.
The exemption pertained to the rule's beneficial ownership requirements for certain products that automatically rollover and renew.
Specifically, products and services that automatically rollover and renew and were established before May 11 – such as share certificates or loan accounts – were exempt.
The CDD rule requires credit unions to identify and verify the beneficial owner(s) of legal entity accounts, subject to certain exceptions. Previously, a credit union was only required to know the identity of each of its legal entity customers but not necessarily its beneficial, natural person owners, NAFCU explained.
Beneficial owners include each natural person who directly or indirectly has a 25% or more equity interest in the legal entity customer, as well as individuals that have "significant responsibility to control, manage or direct a legal entity customer," such as a CEO, COO or CFO.
NAFCU said it has a host of resources available, including a webinar, to help credit unions comply with the rule.
In April, NAFCU further noted it met with FinCEN to share the credit union perspective on regulations under the Bank Secrecy Act (BSA) and impending CDD rule in an effort to improve the industry's regulatory environment. Also in April, FinCEN issued an updated FAQ document to help financial institutions better understand the scope of its CDD final rule.