Examination Guidance for Bank Secrecy Act Customer Due Diligence and Beneficial Ownership Compliance

Letter to Credit Unions 18-CU-02, NCUA

DATE: August 2018
TO: Federally Insured Credit Unions
SUBJ: Examination Guidance for Bank Secrecy Act Customer Due Diligence and Beneficial Ownership Compliance
ENCL: (1) Supervisory Letter – Bank Secrecy Act Customer Due Diligence and Beneficial Ownership Rules, (2) BSA – Questionnaire, (3) Customer Due Diligence and Exam Procedures – Overview, (4) Beneficial Ownership Requirement for Legal Entity Customer – Overview

 

 

Dear Board of Directors and Chief Executive Officer:

The NCUA issued examination procedures to field staff regarding customer due diligence and beneficial ownership provisions that are part of the Bank Secrecy Act/Anti Money Laundering Rules (BSA/AML). The attached supervisory letter provides all federally insured credit unions with the examination expectations provided to the NCUA examiners regarding the review of a credit union’s compliance with these areas. This includes new examination procedures that will be incorporated into the Federal Financial Institutions Examination Council (FFIEC) Bank Secrecy Act/Anti-Money Laundering Examination Manual. To further assist you, the NCUA has consolidated BSA resources for credit unions on the NCUA website.1

As noted in prior updates from the NCUA, effective May 11, 2018, credit unions are required to comply with new BSA/AML rules the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) published on May 11, 2016 (Customer Due Diligence Requirements for Financial Institutions). The rules are intended to codify customer due diligence requirements for covered financial institutions. They contain a new requirement for such institutions to identify and verify the identity of individuals (the beneficial owners) who own or control certain legal entity members, subject to a number of exclusions and exemptions.

The NCUA recognizes that some credit unions may need additional time to implement changes and to fully comply with the new requirements. The NCUA examiners have been instructed to accept a credit union’s reasonable and good faith efforts to comply with the new rule throughout 2018. However, credit unions should understand that the NCUA’s acceptance of good faith efforts for supervision purposes does not shield a credit union from FinCEN penalties that could arise from failing to comply with all BSA/AML requirements.

If you have any questions regarding this letter, please contact your regional office or state supervisory authority.

​Sincerely,

/s/

J. Mark McWatters

Chairman​

Enclosures

2018-09-04T22:45:05+00:00