April 26, 2018

FinCEN's CDD rule FAQs covered in new BSA Blast

BSA Blast April 2018

NAFCU's quarterly BSA Blast e-newsletter, released to members yesterday, provides detailed explanations to some of the questions NAFCU has received related to the Financial Crimes Enforcement Network's (FinCEN) customer due diligence (CDD) rule, which has a mandatory compliance deadline of May 11.

The article, written by NAFCU Regulatory Compliance Counsel Stephanie Lyon, includes detailed responses to five questions: 

  • whether the CDD rule requires credit unions to collect signatures from legal entity members when they open an account;

  • if a credit union should identify the owners of a business or the business itself when documenting the beneficial owner, if the business owns 25 percent of a legal entity;

  • whether the trustor or the trustee of a trust that owns a legal entity should be identified in order to meet the beneficial ownership requirement;

  • what is a qualifying event that would require credit unions to gather beneficial owner information on existing members; and

  • if credit unions need to revise compliance signage for the USA Patriot Act.

Lyon also details other requirements of the CDD rule and provides additional resources – including FinCEN's first and second sets of interpretive guidance – to help credit unions meet the compliance deadline.

A separate article in the e-newsletter, by NAFCU Regulatory Paralegal Shari Pogach, details two recent enforcement actions taken by FinCEN and federal banking regulators. The actions included forfeitures and penalties totaling the highest ever annual total for federal authorities for Bank Secrecy Act and anti-money laundering (BSA/AML) violations in any prior years.

This issue of the BSA Blast also includes a forum with questions and answers about filing a suspicious activity report (SAR) when a validated identity theft is involved and whether credit unions need to keep copies of identification for new members opening an account.

A BSA quiz is also included in this quarter's e-newsletter, which focuses on the CDD rule.