BSA, AML & CDD: Beneficial Ownership Rules

FinCEN's final rule enhancing each bank's Customer Due Diligence (CDD) program required under the Bank Secrecy Act (BSA) was published on May 11, 2016 and applies to MANY types of financial entities. Financial institutions are required to identify and verify the identity of the beneficial owners of each of their legal entity customers. Beneficial ownership must be identified with each new account or other compliance triggers using a Two-Pronged Test covering the following important elements about your nonpersonal customers:

  • Ownership - Identify up to 4 individuals with 25% or more direct or indirect ownership in the entity's equity
  • Control - Identification of one individual with significant responsibility to control, manage, or direct a legal entity

This overview will assist you in determining which entities are covered by the new rule and important aspects of CDD that will be evaluated in your next BSA examination.

Covered Topics:

  • BSA's Four Pillars + CDD/BO
  • Key BSA/AML Components
  • Money Laundering
  • Customer Identification Program
    • Customer Verification
    • Definition
    • Accounts
  • Customer Due Diligence
  • Enhanced Due Diligence
  • Beneficial Ownership
  • Legal Entity Customer
  • Exclusions from Legal Entity Customer
  • Limited Beneficial Ownership CDD Entities
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The cost of subscription is determined by the asset size of your institution. In the case of holding companies or banks under common ownership, the aggregate asset size of participating banks determine the subscription tier.
   Non-bank or < 499M - $125 per month   
   $500M - 999M - $250 per month   
   $1 - 5B - $425 per month   
   $5 - 10B - $600 per month   
   > 10B - $850 per month