(ON DEMAND) New Customer Due Diligence Rules for Beneficial Ownership: Implementation Game Plan

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On May 5, 2016, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued final rules on customer due diligence requirements for banks, credit unions, and other covered institutions.  The new rule adds a fifth pillar to the four pillars of an anti-money laundering program.  Effective May 11, 2018, finding beneficial owners of legal entity customers will become a legal requirement.

Why worry now?  This sweeping change will require significant time and resources to fully understand the rule and its impact on your financial institution’s policies, procedures, forms, monitoring processes, and ongoing due diligence responsibilities.  While regulators can’t require early compliance, they can and will expect to review how well your financial institution understands the changes and the efforts being made to develop a successful implementation plan.  There are no grandfathering features and the new rules will be triggered each time a “legal entity” opens a loan, deposit, or escrow account.

HIGHLIGHTS
What is in the final rule?
What is the definition of a legal entity, what is the coverage, and what are the exclusions?
What’s involved in the two-prong test for ownership and control?
Compliance challenges include: 
Reliance on beneficial ownership information supplied by customers
Collecting beneficial ownership information on existing customers
Heightened expectations for uses of beneficial ownership information
Model certification form issues
What’s expected in risk-based procedures for conducting ongoing customer due diligence?
Understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile
Conducting ongoing monitoring:
Identifying and reporting suspicious transactions
Maintaining and updating customer information on a risk basis

TAKE-AWAY TOOLKIT
Sample new CDD policy
Sample checklist to prepare for the changes
Interview questions for account opening
Employee training log
Quiz you can administer to measure staff learning and a separate answer key

Attendance verification for CE credits provided upon request.

WHO SHOULD ATTEND? BSA officers, BSA personnel, deposit operations staff, branch personnel, risk managers, compliance officers, new account staff, and auditors.

ABOUT THE PRESENTER – Susan Costonis, Compliance Consulting and Training for FIs, a compliance consultant and trainer who began her career in 1978.  She specializes in compliance management along with deposit and lending regulatory training.  Susan has successfully managed compliance programs and exams for institutions that ranged from a community bank to large multi-state bank holding companies.  She has been a compliance officer for institutions supervised by the OCC, FDIC, and Federal Reserve.  Susan has been a Certified Regulatory Compliance Manager since 1998, completed the ABA Graduate Compliance School, and graduated from the University of Akron and the Graduate Banking School of the University of Colorado.  She regularly presents to financial institution audiences in several states and “translates” complex regulations into simple concepts by using humor and real life examples.