FinCEN Extends Exceptive Relief of Beneficial Ownership Requirements

The 90-day limited exceptive relief FinCEN issued to financial institutions following the implementation of the updated Beneficial Ownership/CDD rule was set to expire on August 9.  Just in the nick of time, FinCEN issued a 30-day extension of the exceptive relief, now set to expire on September 8. As a reminder, this is specifically aimed at certain financial products and services that automatically rollover or renew (CDs, loan accounts, etc.) that were established before the original Beneficial Ownership deadline of May 11.

With the extension, FinCEN is expected to “determine whether and to what extent additional exceptive relief may be appropriate” for these financial products and services. (Read the full administrative ruling here.) This exception may be “extended, modified or revoked at FinCEN’s discretion” so FIs should still have policies and procedures in place to deal with these products. 

As we stated with the initial exceptive relief, this doesn’t relieve FIs of the beneficial ownership obligations in regard to these products/services. It is just giving FinCEN an additional 30 days to determine how they want to handle the Beneficial Ownership requirements for these types of accounts moving forward.

Originally, the FinCEN ruling stated that financial institutions needed to gather information on beneficial owners each time a new account is created. This means every time a CD is rolled over or a loan is renewed, a new account is created, and the financial institution would have to gather beneficial ownership information on the same customers over and over again.

FinCEN was quick to acknowledge that financial institutions expressed concern with their ability to comply with the Beneficial Ownership Requirements in regard to these accounts, because historically they haven’t treated them as new accounts, and usually apply automatic processes to continue the banking relationship. We’ll wait and see what definitive ruling FinCEN comes out with in regards to these types of accounts in the next 30 days. 

It’s been three months 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 Banker’s Toolbox 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, Banker’s Toolbox 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.