FinCEN’s limited CDD relief now permanent

FinCEN’s Customer Due Diligence rule has been in effect, for the most part, since May 11, 2018. As you may remember from past blog 1 and blog 2, FinCEN created a limited exceptive relief for certain financial products that present low risks for money laundering and terrorist financing and which the industry does not tend to treat as new accounts. This relief was set to expire first on August 9 and was then extended to September 8, 2018. After months of deliberation and speaking with industry representatives, FinCEN decided to make this relief permanent through FinCEN Ruling FIN-2018-R003.

The FinCEN ruling exempts four different types of accounts from the requirements to collect beneficial ownership information if these accounts were opened before May 11, 2018. The relief only applies to the rollover, renewal, modification or extension of these accounts and not to initial account opening. This means if any of these account types were opened before May 11, 2018, credit unions will not have to collect beneficial ownership information during subsequent rollovers, renewals or certain modifications.

Types of Accounts Exempted

The four types of accounts exempted from the requirement to collect beneficial ownership information are the described by FinCEN as follows:

 

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