Customer Identification Program
This joint release was issued Financial Crimes Enforcement Network
March 5, 2010. It was not a new Board of Governors of the Federal Reserve System
rule, not an amended Federal Deposit Insurance Corporation
Joint Release National Credit Union Administration
regulation. It is GUIDANCE on Office of the Comptroller of the Currency
OBTAINING and RETAINING Office of Thrift Supervision
BENEFICIAL OWNERSHIP Securities and Exchange Commission
INFORMATION. Issued: March 5, 2010
The purpose was to provide Subject: Guidance on Obtaining and Retaining Beneficial Ownership Information
banks with new guidance and The Financial Crimes Enforcement Network (FinCEN), along with the Board of
establish a higher level of Governors of the Federal Reserve System, the Federal Deposit Insurance
expectation among the Corporation, the National Credit Union Administration, the Office of the
Comptroller of the Currency, the Office of Thrift Supervision, and the Securities
regulatory agencies, as well as and Exchange Commission, are issuing this guidance, in consultation with staff
to “enforce” compliance. of the Commodity Futures Trading Commission, to clarify and consolidate
existing regulatory expectations for obtaining beneficial ownership information
for certain accounts and customer relationships. Information on beneficial
ownership in account relationships provides another tool for financial
institutions to better understand and address money laundering and terrorist
financing risks, protect themselves from criminal activity, and assist law
enforcement with investigations and prosecutions.
First word of advice, quit giving deposit customers less risk consideration
than a loan customer.
Formal signed application by Verbal Request
specific borrowers, Immediate Account opening
signatures required ChexSystems
Time taken to evaluate the Drivers License
risk related to the request for Signature Card
credit Add signers as desired
Credit Report Change signers
Financial Statements Secretary of State certificate
Appraisals of good standing, if available.
Credit Underwriting Resolution, if available, some
Purpose or use of loan banks do not use their own
Little knowledge of the
source of funds for deposit.
If you compare what a lender knows about their
customer BEFORE they “open” a loan, to what a
personal banker knows before they open a deposit
account, you can see an obvious higher level of
understanding of the customers business when they are
a borrower than when they are a depositor.
So let’s ask ourselves, how do we get the same level of
understanding of a customer relationship?
Regulators want us to be asking ourselves this question,
•The guidance still includes risk based decisions,
•The guidance still considers risk to the
•The guidance requires the bank to develop
procedures for identifying beneficial ownership
which are commensurate with and enhance their
What do I need to know about this customer?
Why are they banking with our bank?
Who owns the company?
What is the source of their funds?
What are their extended relationships?
Create a more formal application process?
Obtain a credit report on all account owners?
Request financials for commercial
Develop an enterprise wide underwriting
Share information across business lines,
between loan and deposit departments?
The guidance includes one suggestion…..
AML staff may find it useful to cross‐check
for beneficial ownership information in data
systems maintained within the financial
institution for other purposes, such as credit
underwriting, marketing or fraud detection.
Sit down with Develop a strong
executive relationship with the
management and credit underwriting
explain the department.
BSA/AML staff will Step across the lines
need to learn how to between departments
obtain credit admin and divisions.
information within the Develop a strong
organization. rapport with lending
The guidance clearly outlines regulatory expectation to include procedures to
Reasonably identify and verify the
identity of beneficial owners of an
Individuals that have a Enable the individual
level of control over or directly or indirectly to
entitlement to the control, manage or
funds or assets in the direct the accounts.
account that as a
The ability to fund the account or the
entitlement to the funds of the account
alone, however, without any corresponding
authority to control, manage or direct the
accounts does not cause the individual to be a
FI must provide a risk assessment of a new
account opened by a customer that is not an
individual, and may need to take additional
steps to verity the identify of the customer by
seeking information about the ownership or
control over the account, including
In addition, an FI may need to look through
the account in connection and required by
On Site Visits
Secretary of State documentation
Expanded Resolution forms
BSA as a full‐time responsibility
Consider someone from credit underwriting as
part of the BSA management team.
You must have reviewed your due diligence
Have made a determination what you will change,
and enhance, and
Determine at what level you are satisfied that it
meets the expectation of the guidance.
Report this determination to the Board.
Obtain board approval.
To comply and prepare for your next exam
Thank you for participating.
Presented by Ace In The Hole Management
All Rights Reserved 2010