Agencies issue statement on BSA due diligence requirements for PEPs

NCUA, along with the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network and the Office of the Comptroller of the Currency issued a joint statement clarifying that Bank Secrecy Act (BSA) due diligence requirements for customers who may be considered “politically exposed persons” (PEPs) should be commensurate with the risks posed by the PEP relationship.

The term PEP is commonly used to refer to foreign individuals who are or have been entrusted with a prominent public function, as well as their immediate family members and close associates. By virtue of this public position or relationship, these individuals may present a higher risk that their funds may be the proceeds of corruption or other illicit activity.

CUNA’s CompBlog provides analysis on the statement, which clarifies:

  • Like other credit union accounts, accounts held by PEPs are subject to BSA/AML regulatory requirements, including suspicious activity reporting, “customer identification program” (CIP), “customer due diligence” (CDD) and beneficial ownership, as applicable.


continue reading »