CUNA releases compliance resource for final CDD rule

May 10, 2016

With the release of upcoming changes to customer due diligence (CDD) requirements, CUNA’s compliance staff has prepared a CDD compliance chart to address a number of questions. The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) is expected to publish the final rule in the Federal Register Thursday.

The rule, first proposed in August 2014, would amend existing CDD regulations under the Bank Secrecy Act (BSA) by clarifying and strengthening CDD obligations of financial institutions.

The most impactful change is the new requirement that credit unions identify and verify the beneficial owners of all new accounts opened by “legal entities” on or after the rule’s compliance date of May 11, 2018. There are also new requirements that apply to all member accounts.

CUNA’s chart outlines the new provisions and what is required, as well as definitions, and a breakdown of how credit unions can stay in compliance with the new rules. It also answers a number of frequently asked questions, particularly in regards to the beneficial ownership and anti-money laundering (AML) requirements.

Questions that are addressed include:

  • What are the new CDD provisions?
  • What is a beneficial owner?
  • What is a “legal entity account”?
  • How can I verify the beneficial owner’s identification?
  • What kind of written procedures will be required?
  • What are the recordkeeping requirements for this identification and verification information?
  • Why do the new requirements for the AML program appear to be requirements I am already complying with?
  • What are the new risk-based CDD requirements that must be added to an AML/BSA compliance program?

CUNA’s CompBlog also has answers to additional questions on topics such as interest on lawyer trust accounts, Office of Foreign Assets Control compliance and more. CompBlog will be updated going forward with the latest FAQs and other compliance analysis of the new amendments.