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NCUA Issues Exam Procedures on BSA/AML Customer Due Diligence and Beneficial Ownership
Tuesday, August 28, 2018 6:50 AM

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 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. The NCUA has consolidated BSA resources for credit unions on the NCUA website.1

Effective May 11, 2018, credit unions were 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.

NCUA recognized that some credit unions may need additional time to implement changes and to fully comply with the new requirements, so 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, NCUA said 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.

Download the full document in PDF format.