CUNA Seeks Comment on FinCEN Due Diligence Plan
FinCEN recently released an Advanced Notice of Proposed Rulemaking (ANPR) proposing to codify, clarify, consolidate, and strengthen current CDD rules.
The proposed CDD rule would apply to financial institutions, brokers or dealers in securities, mutual funds, futures commission merchants, and introducing brokers in commodities. A key part of the FinCEN ANPR addresses standards for verifying the identity of each member/customer and understanding the "nature and purpose" of each account that is held at an institution to assess the likelihood of suspicious activity.
Credit unions and other institutions would also need to establish and maintain policies for monitoring the accounts they hold under the proposal.
Establishing a uniform CDD regulation would strengthen the ability of financial institutions to identify and report illicit financial transactions, help federal authorities as they investigate potential crimes, and promote greater global financial transparency and aid efforts to combat transnational illicit finance, FinCEN added.
The new regulations, if created, would be one part of a broader U.S. Treasury strategy to enhance financial transparency in order to strengthen efforts to combat financial crime, including money laundering, terrorist financing, and tax evasion, FinCEN said.
In the comment call, CUNA asks credit unions what compliance cost changes, if any, they would need to make if the CDD rule changes are approved. CUNA also asks whether the CDD rules, if approved, should be extended to also cover other institutions covered by FinCEN regulations, including prepaid card providers, money services businesses, non-bank mortgage lenders or originators, and certain other entities. FinCEN has also asked which entities should be exempted from the CDD changes, and how the changes, if adopted, could impact members and customers.
CUNA is accepting credit union comment on the ANPR until April 20. FinCEN will accept public comment until May 4.=
For the full CUNA comment call, click here.