WASHINGTON—The House Financial Services subcommittee’s work with the Financial Crimes Enforcement Network's (FinCEN) customer due diligence (CDD) rule – with a mandatory
compliance date of May 11 – is impacting the credit union industry, NAFCU told the agency last week.
The subcommittee held a hearing Friday on "Implementation of FinCEN's Customer Due Diligence Rule – Financial Institution Perspective."
In a letter sent to the Subcommittee on Financial Institutions and Consumer Credit Chairman Blaine Luetkemeyer (R-MO) and Ranking Member Lacy Clay (D-MO), NAFCU Vice President of Legislative Affairs Brad Thaler explained that, even though FinCEN has provided guidance documents, more guidance is needed from FinCEN on this rule and how certain areas within the rule could bring a "lack of uniformity" in how regulators evaluate compliance. Thaler also noted the association's support of legislative efforts to ensure better coordination between state agencies, law enforcement and financial institutions on new beneficial ownership requirements under the new rule in order to not overburden credit unions with new requirements.
The final CDD rule requires credit unions and other covered institutions to identify the beneficial owners (25% or higher ownership) who control legal entities who open accounts. The rule also amends the anti-money laundering program requirements to include risk-based procedures to conduct ongoing member due diligence.