99.99% percent of our loan customers have DDA transaction accounts and get BSA risk rated initially through the DDA account opening process. We recently went through an external audit and the question was posed on how we BSA risk rate loan only customers. How do other FI handle this? What kind of questions are asked and rated for Commercial Loan only customers and Mortgage only customers?

I want to develop a one form fits all questionnaire for use by the entire bank at all new account levels.

Thanks for your input!

I had a similar question come up in a meeting recently so I am curious to hear what others are doing as well.

Our CIP/CDD process is applied consistently across all bank products. Most of the time the basic CDD questions, which are difficult to get answered on the retail side, are part of safe and sound lending practices. For example, most loan officers know, in detail, the purpose of the loan, the origin of funds (As it relates to repayment) and the actual beneficial owners of any complex legal structures.

It's been my experience that risk rating loan accounts is far easier than retail accounts, as a good loan officer really does know his customer.

Unless you're dealing in trade finance or letters of credit, most loans are going to be low to medium risk in terms of AML risk.

2manyrules: Trying to do a "one form fits all" approach might not be a good idea. Risk questions will tend to be different for loan v. deposit, for consumer v. commercial and for individual v. business entity.

I would also be interested in hearing how others do this as well.

For loan only customers, 99% of them are low BSA/AML risk in my world.

Unless the borrower is a PEP or had a SAR filed. My logic is that the customer has gone through a very detailed credit/due diligence review; we only allow the funds to be disbursed directly to the customer, and with the exception of Asset Based Lending customers, must be repaid by the customer from an account in their name, I believe the money laundering risk to be low.

Up to this point no auditor or examiner has questioned this logic.