On September 7, 2018, the Financial Crimes Enforcement Network (FinCEN) granted permanent exceptive relief to financial institutions from the Beneficial Ownership Rule’s requirement to identify and verify beneficial ownership information for the following rollovers and renewals occurring on or after May 11, 2018:
- CD rollovers;
- Loan renewals, modifications, and extensions (e.g., setting a later payoff date) that do not require underwriting review and approval;
- Commercial line of credit or credit card account renewals, modifications, or extensions (e.g., setting a later payoff date) that do not require underwriting review and approval; and,
- Safe deposit box rental renewals.
FinCEN has determined that each of the account relationships described above presents low risk for money laundering and terrorist financing (ML/TF) because the features of such accounts make their use for ML/TF activity impractical. FinCEN feels the removal of these obligations does not have a significant impact on the information that’s available and useful to law enforcement.
Keep in mind; however, that financial institutions still MUST collect beneficial ownership information at account opening for accounts that have rollover, renewal, modification or extension features. Additionally, financial institutions are obligated to collect sufficient information to understand the nature and purpose of customer relationships in order to develop a customer risk profile, as part of the AML program requirement. Regardless of whether an account was established before or after May 11, 2018, ongoing monitoring must be in place to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.
The announcement also provides descriptions and characteristics for each of the account products covered under the exceptive relief from the Rule.
Diane joined Banker’s Compliance Consulting with over 10 years of compliance experience and over 15 years of experience within the financial industry. Diane is a Certified Regulatory Compliance Manager (CRCM) and has a Bachelor’s Degree in Sociology with a concentration in Criminal Justice. She is a graduate of the Schools of Banking Compliance School and has participated in various other training opportunities throughout her career. Diane understands firsthand the struggles banks face in building and maintaining successful compliance programs. Her experience and common sense approach to consumer compliance is a great asset to our clients.
Diane and her husband have two kids who keep them busy. She enjoys running and other sports and is a big Bugs Bunny fan! She’s a bit crazy in that she does enjoy reading some of these regulations and she’s a “crazy cat lady!” Her cat tales are hilarious!