OFAC and the CDD rule working together

NCUA came out with its Customer Due Diligence (CDD) and Beneficial Ownership Examination procedures not long ago; we blogged on this back in September. While reviewing the procedures, NAFCU identified an item of interest to credit unions:

“Do the policies and procedures define how member information, including beneficial ownership information for legal entity customers/members, is used to meet other regulatory requirements, including but not limited to, identifying suspicious activity and determining OFAC sanctioned parties?” (Emphasis added.)

It is interesting NCUA decided to include a reference to a completely different regulatory requirement in its BSA examination guidance, especially as NCUA came out with Letter to Credit Unions 05-CU-09 that notes the differences between OFAC and BSA requirements. See, Question #1. Nonetheless, the question of whether and how credit unions plan to use beneficial ownership information is valid for the purposes of determining OFAC compliance. NCUA has been delegated the authority to examine both BSA and OFAC compliance so knowing what the agency expects with relation to both sets of requirements is important for federally-insured credit unions. NAFCU has blogged at length on the CDD rule. However, in light of NCUA’s reference to OFAC, it now seems like a good time to brush up on OFAC requirements.


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