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#2261750 - 10/28/21 02:58 PM Beneficial Ownership - Integrated Payables
BSAN3rd Offline
Junior Member
Joined: Sep 2016
Posts: 32
Hi all,

Pretty specific question here; I am being asked if UBO should be required as part of an Integrated Payables agreement for Cash Management.

According to FinCEN - it seems as though my answer should be yes?

For purposes of the CIP rule, an “account” is a formal banking relationship established to provide or engage in services, dealings, or other financial transactions, including a deposit account, a transaction or asset account, a credit account, or other extension of credit. An account includes a relationship established to provide a safety deposit box or other safekeeping services, or cash management, custodian, and trust services.

An account does not include: 8
• A product or service where a formal banking relationship is not established with a person, such as check-cashing, wire transfer, or sale of a check or money order;
• An account that the bank acquires through an acquisition, merger, purchase of assets, or assumption of liabilities; or
• An account opened for the purpose of participating in an employee benefit plan established under the Employee Retirement Income Security Act of 1974.

The CIP rule applies to a customer, 9 which means:
• A person that opens a new account; and
• An individual who opens a new account for:
o An individual who lacks legal capacity, such as a minor; or
o An entity that is not a legal person, such as a civic club.

A customer does not include a person who does not receive banking services, such as a person whose loan application is denied10 or a person that has an existing account with the bank, provided that the bank has a reasonable belief that it knows the true identity of the person.11 Also excluded from the definition of customer are financial institutions regulated by a federal functional regulator or a bank regulated by a state bank regulator, governmental entities, and publicly traded companies as described in 31 CFR 1020.315(b)(2) through (b)(4). 12

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#2261826 - 10/29/21 02:26 PM Re: Beneficial Ownership - Integrated Payables BSAN3rd
ColoradoAML Offline
Gold Star
Joined: Mar 2018
Posts: 289
I'll preface by saying I'm not familiar with Integrated Payables.

I think you're asking the right question, and I think you're in a grey area. We consider most of our cash management services to be ancellary to accounts rather than accounts themselves, and therefore we do not require beneficial ownership. The services require an account, and we've collected BO for that, but each time they add sweep services, or wire origination, or RDC capability, those are all in service of their existing account the same way a debit card is. Our regulators have accepted that argument, but I'm not prepared to say that's the universal interpretation.

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