In case you missed it, the Agencies (FDIC, FRB, OCC, FinCEN & NCUA) issued a joint statement regarding customer due diligence (CDD) on July 6th.
The purpose of the joint statement was to reiterate and clarify that there is not any sort of predetermined or specified risk level for customers engaging in one type of activity or another. For example, not all cash-intensive businesses are to be automatically considered high risk for money laundering (ML), terrorist financing (TF), or other illicit financial activity. Additionally, institutions are not prohibited or discouraged from providing banking services just because a customer participates in a certain type of activity.
The Agencies want institutions to understand each customer relationship presents varying risks of ML/TF and other illicit financial activity. It’s an institution’s job to assess what those risks are, based on a number of factors, with appropriate CDD procedures and processes and then effectively manage and mitigate those risks.
If you want to learn more about effective CDD programs, we invite you to check out our webinar, “Customer Due Diligence Programs & Beneficial Owners”, which is available now OnDemand!
Published
2022/07/13