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#781067 - 07/23/07 08:41 PM CDD Policy
ComplianceGurl, CRCM Offline
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Joined: Jul 2007
Posts: 497
Our auditor is asking for a Customer Due Diligence policy. Would anyone happen to have one they could share with me? We cover alot of it in our CIP policy but apparently that isn't sufficient. I am very new to BSA and any help would be greatly appreciated!
Thank you!

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BSA/AML/CIP/OFAC Forum
#781318 - 07/24/07 01:45 PM Re: CDD Policy ComplianceGurl, CRCM
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Certainly, customer due diligence and enhanced due diligence should be mentioned in your AML policy, but there is no need for a separate policy and I doubt that there are many potential donors among your readership. Consider enhancing your BSA/AML policy with the appropriate paragraphs and supporting them with appropriate procedures to be used at account opening and over the life of the account.

In essence, due diligence at account opening is about asking questions the law does not require you to ask, but which would help you to both predict the customer's future activity and identify customers subject to "expanded examination overview." Due diligence during the life of the account translates to reviewing standard reports in an attempt to identify unexpected behavior. In both cases, the actions are foreplay for enhanced due diligence wherever circumstances merit.
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#781527 - 07/24/07 03:59 PM Re: CDD Policy Elwood P. Dowd
ComplianceGurl, CRCM Offline
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Joined: Jul 2007
Posts: 497
Thank you very much for your reply. I'll definitely start with our existing policy and build on that.

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#781622 - 07/24/07 05:06 PM Re: CDD Policy ComplianceGurl, CRCM
ckty2k Offline
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Joined: Mar 2005
Posts: 47
Hong Kong
I have just read an editorial piece which states that :
"Customer Due Diligence (CDD), also known as Enhanced Due Diligence (EDD)".

Do you agree with this, I always think EDD means more in depth understanding about the client !
Last edited by ckty2k; 07/24/07 05:10 PM.
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#781671 - 07/24/07 05:51 PM Re: CDD Policy ckty2k
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
The terms are not synonyms.

As illustrated above, your bank should perform due diligence on all customers, both at account inception and during the life of the account.

You perform enhanced due diligence; i.e. you focus extra efforts on an individual customer, when you have a reason to do so. One example might be when the person opening the account says his company performs financial services and it triggers additional quesitons. Another circumstance might be when a consumer has shown up on a routine report indicating a large balance change or a large cash transaction. Since that is not "normal" consumer activity, you investigate the transaction...
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In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

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#781683 - 07/24/07 05:59 PM Re: CDD Policy Elwood P. Dowd
ckty2k Offline
Junior Member
Joined: Mar 2005
Posts: 47
Hong Kong
Yes, totally agree that EDD is something more than CDD.

How do you balance "things banker need to know" and "customers' personal privacy"?
Can anyone share what information they asked for EDD, thanks !

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