WASHINGTON–The Treasury Financial Crimes Enforcement Network’s (FinCEN) customer due diligence (CDD) rule became effective, and both CUNA and FinCEN are saying they have resources available for credit unions.
FinCEN has issued two sets of frequently asked questions, one in July 2016 and one in April of this year. In addition, the Federal Financial Institutions Examination Council (FFIEC) just issued new CDD examination procedures, with the update found in the CDD section of FFIEC’s Bank Secrecy Act/Anti-money Laundering Examination Manual, CUNA noted.
The final rule clarifies and strengthens customer due diligence requirements for financial institutions and other entities, and adds a new requirement for these covered financial institutions to identify and verify the identity the natural persons (known as beneficial owners) of legal entity customers who own, control and profit from companies when those companies open accounts.
What the Rule Does
Specifically, the rule requires covered financial institutions to establish and maintain written policies and procedures that are reasonably designed to:
- Identify and verify the identity of customers
- Identify and verify the identity of the beneficial owners of companies opening accounts
- Understand the nature and purpose of customer relationships to develop customer risk profiles
- Conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information
Other resources include:
- CUNA has developed a CDD checklist, final rule summary and CDD compliance chart.
- CUNA CompBlog posts detailing some of the rule’s exceptions and exemptions and account guidance, among other topics
- An electronic certification form
- A session on the rule was part of the CUNA/National Association of State Credit Union Supervisors Bank Secrecy Act Conference last year