When the 88 page
Customer Due Diligence proposal was issued this week, several people asked me
to explain the proposed requirements to them “in a nutshell”. Here goes….
Written procedures: Credit unions will be required to establish and
maintain written procedures designed to identify and verify the beneficial
owners of legal entity members, such as corporations, LLCs, partnerships, and
Identification: Credit unions will identify the beneficial owners by
having the individual who is opening the account fill out a “Certification
Regarding Beneficial Owners of Legal Entity Customers” form (included in the Appendix
to the rule). This form will certify that the beneficial owner information provided
on the form is correct.
Verification: Credit unions will verify the identity of the each of the beneficial
owners listed on the certification form by, at a minimum, following the same
procedures currently used for verification in their CIP programs;
Beneficial Owner: A “beneficial owner” is defined as:
individual, if any, who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, owns 25% or more of the
equity interest of the legal entity member; and/or
(2) a single
individual with significant responsibility to control, manage, or direct a
legal entity member, including an executive officer or senior manager, such as
the CEO, CFO, COO, Managing Member, General Partner, President, Vice President,
or Treasurer; or any other individual who regularly performs similar functions.
Recordkeeping: Credit unions will be required to maintain a record
that includes the certification form and any other identifying information, and
retain the record for five years after the date the account is closed.
Beneficial Owner Certification Form: The certification form will be completed by the
person opening the account on behalf of the legal entity. The information on the form includes:
- The name,
address, date of birth and SSN (or passport number or other similar information)
for each beneficial owner;
- The name of the
person opening the account;
- The name of the
legal entity; and
- A signed
certification by the person opening the account that the information provided
on the form is complete and correct, to the best of their knowledge.
Comments: Don't forget to send your comments to CUNA's Dennis Tsang at firstname.lastname@example.org.