New BSA/AML Customer Due Diligence Requirements

Recorded on November 03, 2016   |   With Ken Golliher

New BSA/AML Customer Due Diligence Requirements

With Ken Golliher
  • 1 Video
  • 3 PDFs
  • 2.0 hrs
Course description

ICB Credit: 2.5 CRCM

U.S. financial institutions have been given two years, until May 11, 2018, to develop individual programs for identifying a legal entity’s “beneficial owners” at account inception. Examiners and auditors cannot mandate early compliance (although some attempts have been noted in the BankersOnline forums), but they can critique a bank’s understanding of the new regulation or the adequacy of its steps toward compliance at the time of their review.

The rule adds a new “fifth pillar” to your AML program mandating that your institution establish and update customer information to assure that your bank knows what is “normal” vs. “suspicious” activity for higher risk customers. Also, your institution is required to identify the “beneficial owners” and a control person for each of its legal entity customers, regardless of perceived risk, whenever they open a new account and you are required to verify their identity. That is true whether it is a loan, deposit, or trust relationship.

This fast-paced two hour session allows attendees to familiarize themselves with the requirements of the new regulation and develop an implementation plan that will require both board involvement in revising policies and operational involvement in revising account opening procedures.

Topics addressed in the webinar include:

  • Legal entities 101
  • What do you actually need to read and digest?
  • Developing a Due Diligence Policy (sample provided)
  • The “ownership” and “control” prongs of the rule
  • Appendix A (the form that can be used by the entity to provide information)
  • Revising Appendix A (samples provided)
  • Trashing Appendix A
  • How do we verify identity?
  • Supplementing your CIP with a “BOIP”
  • Handling identification misfires
  • Excluded entities
  • Record retention
  • What do we do with the information? (Hint: Putting it in a file until an examiner asks for it is not the right answer.)

Who Should Attend: The program is focused on new requirements added to the Bank Secrecy Act regulations. Those who would naturally attend are the BSA Officers and Auditors. However, the most direct impact of this new regulation is going to be on those who design and manage the “new accounts” process which will be tasked with obtaining more information from legal entity customers. They need to be in the room and be kept informed when these decisions are made.

This is an improved version of a BOL webinar presented in June, 2016. Repeat attendance is not encouraged unless you are using it to train additional staff members.

Course Curriculum

New BSA/AML Customer Due Diligence Requirements
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Ken  Golliher
Ken Golliher

Ken is a principal with Pegasus Educational Services, LLC, a training firm headquartered in Louisville, Kentucky. He is an experienced banker with a unique ability to reduce complex legal concepts to plain English. He has explained the "why" and "how" of regulations to thousands of financial institution personnel and examiners. Ken's banking career began in 1972 and includes serving as a teller, commercial operations manager and as trust department legal counsel in a state and a national bank. For ten years he headed the education division of a regional consulting firm for financial institutions. He has served on the faculty of the LSU Graduate School of Banking, the OTS' Level I Compliance School and the FDIC's Advanced Consumer Protection school for examiners. He has presented seminars in more than 25 states and has served as an instructor at compliance schools sponsored by the Illinois, Indiana, Iowa, Georgia, Kansas, Kentucky, Nebraska, Oklahoma, Pennsylvania and Texas bankers associations. He is a member of the Society for Applied Learning Technology. He is also a "BOL Guru."