WASHINGTON–Today is the deadline for compliance with the customer due diligence rules of the Bank Secrecy Act. Even credit unions that do no business with the various sophisticated entities the regulation is designed to address are being reminded they still need policies and procedures in place in response to the guidance.
As CUToday.info has reported, the Financial Crimes Enforcement Network (FinCEN) first issued an advance notice of proposed rulemaking in 2012, then its proposed CDD rule in 2014, and then its final rule in 2016, before giving financial institutions two years to prepare.
The new rules require covered financial institutions to identify and verify the identity of beneficial owners of customers/members each time a new account is opened. The financial institution may rely on copies of identity documents supplied by the customer as long as they believe the information is reliable. The final rule also requires anti-money laundering programs to explicitly include risk-based procedures for conducting ongoing CDD and developing a customer risk profile.
The rules going into effect today include a new section specifically on beneficial ownership requirements. Financial institutions must have written procedures to identify and verify “beneficial owners of customers.” In the case of credit unions, these “beneficial owners” are the owners or “those who benefit from ownership” of businesses. The written procedures must be contained in the CU’s anti-money laundering compliance programs.