FinCEN CDD Final Rule facts

On May 11, 2018, financial institutions will be required to perform Customer Due Diligence routines for their legal entity customers, such as a corporation or limited liability company.

Here are 3 facts that you should know about this upcoming rule:

  1. When validating ownership, financial institutions can accept what customers have provided unless they have a reason to believe otherwise.
  2. Some possible trigger events requiring review of beneficial ownership information for existing accounts include: change in ownership and law enforcement warrants or subpoenas.
  3. When collecting and updating beneficial ownership information, the financial institution must retain the original and updated information.

While financial institutions are required to collect the same basic customer identification program information from business owners that is required from consumer customers, your current policies may not satisfy this new rule.

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