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In Response To:
Thread Starter: ColoradoAML
Title: Re: CDD and CIP

Hi Anonymous,

CDD is not limited only to legal entities. The purpose of CDD is to have a baseline of activity so that you know when a customer is operating outside of those bounds and can investigate and report SARs appropriately. What that CDD looks like is a risk decision, but I would be concerned that stating all of your consumer customers a so low risk that no CDD is necessary may draw some criticism.

I think the exam manual is always a very good starting point: https://bsaaml.ffiec.gov/manual/AssessingComplianceWithBSARegulatoryRequirements/02

I think that CDD on a CD may look very different from CDD on a checking account, because the risk of money laundering is far lower. You may still consider if you want to determine the customer's occupation/PEP status/source of wealth or any number of other questions when opening a CD.

Similarly, collecting CDD on existing customer may look different from new customers, but it's also a good opportunity to update your info.

Finally, CDD and CIP are not either/or, they're both BSA requirements.