CDD Day is here!
Greetings Compliance friends, today is the day!
As many of you know, today is the mandatory compliance deadline for FinCEN’s Customer Due Diligence (CDD) requirements. FinCEN originally published the final rule on May 11, 2016, and has since issued guidance in the form of “frequently asked questions” not once, but twice. We at NAFCU have discussed some of these implications in recent blogs, as well as this handy webinar. As a result of the new rule, credit unions will be required to identify and verify the identity of beneficial owners of new legal entity members, form customer risk profiles, and more closely monitor these accounts for suspicious activity. Here are a few reminders on things we’ve touched on before, as well as a recurring compliance question we received on how to address members who do not respond to renewal or rollover requests.
First, what about current business accounts? When it comes to business accounts established prior to the May 11, 2018 deadline, it does not appear that credit unions are required to go back and retroactively collect information on these beneficial owners. Here is a discussion from the preamble as well as a past NAFCU Compliance Blog which both explain that other than some kind of triggering event, the rule does not apply retroactively.
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