WASHINGTON (9/2/14)--The Credit Union National Association has issued a comment call for a proposed rule that would clarify and strengthen member/customer due diligence obligations of financial institutions.
The proposal, issued by the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN), aims to amend regulations in the Bank Secrecy Act (BSA) to prevent anonymous companies from conducting illegal activity in the American financial sector (News Now Aug. 4).
The rule would clarify that customer due diligence includes: identifying and verifying identities of members; identifying and verifying beneficial owners of legal entity members; understanding the nature and purpose of member relationships; conducting ongoing monitoring to maintain and update customer information and to identify and report suspicious transactions.
There would also be a new explicit regulatory requirement for a financial institution to establish and maintain written customer due diligence procedures that are "reasonably designed to identify and verify beneficial owners of legal entity customers." Existing supervisory guidance would also be incorporated.
The proposed effective date would be one year after the final rule is issued.
CUNA's comment call asks credit unions to answer several questions, including:
Comments to CUNA are due by Sept. 22, and the deadline for comments to FinCEN are due by Oct. 3.
Use the resource link to access the full comment call.