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FinCEN Grants Beneficial Ownership Exceptive Relief

Abrigo
September 7, 2018
Read Time: 0 min

FinCEN granted exceptive relief of beneficial ownership requirements for certain products.

FinCEN announced Friday they have granted the exceptive relief of Beneficial Ownership requirements for certain products or services that automatically rollover or renew indefinitely. Those products include:

  • A rollover of a certificate of deposit (CD);
  • A renewal, modification, or extension of a loan or commercial line of credit or credit card account (ex - setting a later payoff date) that does not require underwriting review and approval;
  • A renewal of a safe deposit box rental.

It is important to note the exception specifically applies to the rollover, renewal, modification or extension of any of the types of accounts listed above that happened on or after May 11, 2018. The Beneficial Ownership requirements still apply to all of these accounts at account opening. Additionally, financial institutions still need to comply with all other AML and BSA requirements regarding these types of accounts. (Read the full ruling here.)

On May 16, FinCEN issued a 90-day exceptive relief (retroactive to May 11) to the updated CDD rule before issuing another 30-day extension in August. That extension was set to expire on September 8. These extensions gave FinCEN time to determine to if, and to what extent, an exception to the Beneficial Ownership Rule would be appropriate for these products and services. Following the May 11 deadline, FinCEN was quick to acknowledge financial institutions' concern with their ability to comply with the updated rule in regard to accounts that automatically rollover or renew, because historically they haven’t treated them as new accounts, and usually apply automatic processes to continue the banking relationship. They worked with representatives from financial institutions, trade associations, law enforcement, and regulators to assess the threat these types of accounts pose to money laundering and financial crimes and ultimately determined the risk was low enough to extend the exceptive relief.

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It's been almost a year since the new CDD rule went into effect. Is your institution compliant and ready for your next exam? If you're not sure, our experts at Abrigo are here to help. Call us for more information on our Fifth Pillar Program Evaluation to ensure you are ready to meet your regulators at the door with a confident smile.

For up-to-date information on the CDD rule, check out FinCEN's dedicated CDD page. 

If you are short staffed and are looking for some relief, Abrigo has a CAMS certified team of consultants who will work with you to ensure your BSA program’s health stays strong.  Learn more about the services we offer or contact an expert today.

About the Author

Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo’s platform centralizes the institution’s data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth. Make Big Things Happen.

Full Bio

About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

Make Big Things Happen.

 

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