Compliance: Beneficial owner relief extended thru Sept. 8

August 20, 2018

The Treasury’s Financial Crimes Enforcement Network (FinCEN) has extended the Beneficial Ownership Rule’s limited exception for rollover and/or renewal of certain accounts for an additional 30 days. It was scheduled to expire Aug. 9, and now will be in place up to and including Sept. 8.

Under FinCEN’s customer due diligence rule that became effective May 11, covered financial institutions are required to obtain information on the beneficial owners of a legal entity that opens a new account for each new formal banking relationship established, even if the legal entity is an existing customer.

The relief issued by FinCEN grants credit unions relief from the beneficial ownership requirements for Legal Entity member accounts that automatically renew or rollover, such as certain term share accounts and loans. 

FinCEN issued the original 90-day limited exception in order to determine whether, and to what extent, a further exception would be appropriate for such products and services.

As a member of an advisory group to FinCEN, CUNA has had a number of discussions about the issue and will continue to share credit unions’ concerns about the compliance burden if this limited relief expires Sept. 8.

In addition to the CompBlog, CUNA’s Compliance Community contains discussion boards and a number of other resources for credit union compliance professionals around the country.