Removing Barriers Blog

NCUA and Federal Financial Regulators Clarify BSA Due Diligence for Credit Unions and Banks that Serve Charities and Non-Profits
Posted November 23, 2020 by CUNA Advocacy

The NCUA and other Federal financial regulators issued a joint fact sheet regarding compliance efforts required to meet Bank Secrecy Act (BSA) due diligence requirements for customers that are charities and other nonprofit organizations.  

In the joint statement, the agencies stated that the due diligence efforts should be based on the money laundering risks posed by the customer relationship.  The clarification was issued to recognize that legitimate charities and nonprofits deserve and benefit from access to financial services, and “do not present a uniform or unacceptably high risk of being used or exploited for money laundering, terrorist financing, or sanctions violations . . ..”  Accordingly, the due diligence expected of credit unions and other banks should be based on the risk profile of individual charitable customers, and the fact sheet gives examples of useful customer data that credit unions may want to collect to help determine those risks.

The fact sheet was developed and disseminated by the National Credit Union Administration, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network, and the Office of the Comptroller of the Currency.