Hello all,

New to the forum. New to my position. I came from a large bank to a small/local community bank.

Here, the entire BSA/AML process is entirely manual from CTR/SAR/Transaction Monitoring/Risk rating customers/Reviewing CIP docs/tracking/etc.

Here is my question:

Right now, as the entire process is manual, front-line employees have been instructed to forward me all Beneficial Ownership forms. I am tracking them all on a spreadsheet. Up until this point, BO Cert forms were only being collected for new customers with new accounts, not existing customers. I immediately fixed that and have instructed that all new accounts should have BO Forms completed as well. Is this information supposed to be verified at every account opening regardless of a week later vs a year later? Can the bank assume the risk and only verify it yearly for example? Or does the rule say we need to verify/complete a form at every opening? If so, can you point me to the guidance indicating that to take to my CRO?

There is clearly a lot of work to do with this process being so manual and behind in technology. I was brought onboard to automate the process as quickly as possible to relieve some of this burden. I just want to confirm what is expected in terms of re-cert requirements.

I appreciate all the help.

Sec. 1010.230 Beneficial ownership requirements for legal entity customers.


(b) Identification and verification. With respect to legal entity customers, the covered financial institution’s customer due diligence procedures shall enable the institution to:

(1) Identify the beneficial owner(s) of each legal entity customer at the time a new account is opened, unless the customer is otherwise excluded pursuant to paragraph (e) of this section or the account is exempted pursuant to paragraph (h) of this section.

First of all, welcome to BOL.



In addition to what Randy said, take a look at the FFIEC FAQs are found here: https://www.fincen.gov/sites/default/files/2018-04/FinCEN_Guidance_CDD_FAQ_FINAL_508_2.pdf

FAQ 10 is pretty clear that beneficial owners must be identified for each account:

"Question 10: Identification and verification: Certification when a single legal entity customer opens multiple accounts If a legal entity customer opens multiple accounts at a covered financial institution (whether or not simultaneously), must the financial institution identify and verify the customer’s beneficial ownership for each account?

A. Generally, covered financial institutions must identify and verify the legal entity customer’s beneficial ownership information for each new account opening, regardless of the number of accounts opened or over a specific period of time. However, an institution that has already obtained a Certification Form (or its equivalent) for the beneficial owner(s) of the legal entity customer may rely on that information to fulfill the beneficial ownership requirement for subsequent accounts, provided the customer certifies or confirms (verbally or in writing) that such information is up-to-date and accurate at the time each subsequent account is opened and the financial institution has no knowledge of facts that would reasonably call into question the reliability of such information. The institution would also need to maintain a record of such certification or confirmation, including for both verbal and written confirmations by the customer. "

At this point, not yet being automated, would you suggest just obtaining the full verification for every account opening? It seems like, it would throw another wrinkle into my front-line's work trying to determine whether they should complete a full form or just document a confirmation of ownership.

When I visualize future automation, a simple button click can confirm and refresh information for us, but for now, there is no easy way to track it being a one person show.

To me, in a fully manual process it would be much easier just to collect a new form.

Perfect. Thank you everyone. I really appreciate it.

PraBSA, I am also from a small community bank where everything is manual. I'm still fairly new as BSA Officer and having a slow time bringing our BSA program up to date being everything is manual and no programs to help with risking. Can you share what your spreadsheet looks like and how you do the tracking?

Thanks,
Julie

Our process is manual as well. I found it is easy just to collect the a full certification form at each account opening. The form is built into our account workflow and generates from that system.