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NAFCU on Thursday told a House Financial Services subcommittee of its work with the Financial Crimes Enforcement Network's (FinCEN) customer due diligence (CDD) rule and how the rule – with a mandatory compliance date of May 11 – is impacting the credit union industry.
 
Today, the subcommittee is holding the hearing "Implementation of FinCEN's Customer Due Diligence Rule – Financial Institution Perspective." The hearing is set to begin at 9:30 a.m. Eastern.
 
In a letter sent to 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 percent 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.  
 
On Monday, NAFCU 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. NAFCU's recently released BSA Blast e-newsletter also provides detailed explanations on some of the questions NAFCU has received related to the CDD rule. Other resources related to the rule, including FinCEN's first and second sets of interpretive guidance, is also available in the e-newsletter.
 
Earlier this month, FinCEN issued an updated FAQ document to help financial institutions better understand the scope of its CDD final rule.
 
NAFCU has additional compliance resources, including a recent blog post, on the CDD rule available here.