Customer Identification Programs & Due Diligence Final Rules
It’s time to implement new CDD rules for consumers and legal entities
FinCEN is issuing final rules to clarify and strengthen CDD requirements. Learn everything you need to get your program in compliance, including scripts, monitoring tips and information about managing the consumer process.
FinCEN believes there are four core elements of customer due diligence (CDD), and that they should be explicit requirements in the antimony laundering (AML) program for all covered institutions to ensure clarity and consistency across sectors: (1) CIP and verification, (2) beneficial ownership identification and verification, (3) understanding the nature and purpose of customer relationships to develop a risk profile and (4) ongoing monitoring for reporting suspicious transactions and maintaining and updating customer information. The first is already a requirement and the second will be required by this final rule. The third and fourth elements are already implicitly required but will now become explicit requirements.
- Four key elements of CDD
- Line by look at both CDD and CIP regulation
- How to implement new CDD legal entity and beneficial ownership rule
- New form requirements — do we have to use it?
- Accounts covered and not covered under new rules
- Understand new monitoring requirements and develop questionaires
- Sample policy, sample procedures and excel spread sheets
- CIP and CDD issues for owners, signers and controlling persons
- What Information that must be obtained before an account is opened
- Required documentary and non-documentary verification
- Should we add more types of identification? What types are available?
- Do we keep CIP up to date?
- How should we address online banking?
- Is nondocumentary verification enough?
- Can we back off from our CIP of 2003 now that we have more systems in place?
- Examination expectations on CDD
- Keeping customer records up to date
- Anticipating transactions and activities
- EDD on high risk customers
- Developing the questionnaire
- When should we close a relationship? And how do we close?
- What regulatory concerns do we have?
- Working with sales and not against them
BSA officers and support personnel, deposit operations, compliance officers and training officers.
Deborah Crawford is the President of Gettechnical Inc, a firm specializing in the education of financial institutions across the nation. Her 27+ years of experience began at Hibernia National Bank in New Orleans. Debbie specializes in the education of financial institution employees and officers in the area of deposit account laws, new account documentation, insurance, compliance regulations and IRAs.
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