Beneficial Ownership Form Question

Posted By: Curious in Kansas

Beneficial Ownership Form Question - 06/14/21 01:56 PM

We have a business account that has three authorized signers on - John Doe, Steve Doe, and Bill Doe. The Beneficial Ownership form was completed with John Doe as the Controlling Person and all of John's information is listed. We have the current ID for John Doe. But Steve Doe signed the form. Couple of questions here:

(1) Is this allowed? Steve is an authorized signer.
(2) Do I need to ensure I have valid ID for Steve?

Thank you in advance for your help!
Posted By: ColoradoAML

Re: Beneficial Ownership Form Question - 06/14/21 02:22 PM

1) There is no requirement that the person that signs the form is an owner or controlling person for the business; they're just certifying that it's accurate.

2) You do not need Steve's ID solely because he signed the form. Whether or not you need it based on him being a signer depends on your CIP.
Posted By: Curious in Kansas

Re: Beneficial Ownership Form Question - 06/14/21 02:32 PM

1) OK, thank you.
2) We're FDIC regulated. We were told at our last FDIC exam in March 2020 that whomever signs the form/is the Controlling Person, we must have their current ID on file.
Posted By: ColoradoAML

Re: Beneficial Ownership Form Question - 06/14/21 03:49 PM

If they said that, they were mistaken. There's no requirement that the person that signs the form is a controlling person. All you need from the beneficial owners and control person is that someone provide their identifying information, not their signature.

Furthermore, there's no requirement that a certification of beneficial ownership be signed at all.
Posted By: Adam Witmer

Re: Beneficial Ownership Form Question - 06/14/21 04:01 PM

Originally Posted by Curious in Kansas
We were told at our last FDIC exam in March 2020 that whomever signs the form/is the Controlling Person, we must have their current ID on file.

The person opening the account doesn't even need to be a beneficial owner, and certainly doesn't need to be the controlling person. It could be, but it isn't required.
Posted By: edAudit

Re: Beneficial Ownership Form Question - 06/15/21 12:20 PM

" business account that has three authorized signers on - John Doe, Steve Doe, and Bill Doe. "

Why would you not have ID for one of the signers?

What does your board approved policy say?
Posted By: rlcarey

Re: Beneficial Ownership Form Question - 06/15/21 01:50 PM

Because a signer on a business account is not an account owner and under the CIP rules there is no requirement to complete CIP on authorized signers, although many banks do under their board approved CIP program.
Posted By: edAudit

Re: Beneficial Ownership Form Question - 06/15/21 02:48 PM

While I agree from a "CIP requirement" it is not necessary but from a fraud perspective (and reputational risk)I would like to know who is signing on all accounts including a business account. Hence the reasoning for some board approved policy with this requirement in it.
Posted By: John Burnett

Re: Beneficial Ownership Form Question - 06/15/21 03:22 PM

Originally Posted by Curious in Kansas
1) OK, thank you.
2) We're FDIC regulated. We were told at our last FDIC exam in March 2020 that whomever signs the form/is the Controlling Person, we must have their current ID on file.

The "Control Person" is supposed to be at the corporate level. If you are opening an account for a local store owned and operated by a corporation in Kalamazoo, you should have someone from the headquarters listed as the Control Person. That person does not need to be a signer on the account and certainly does not have to be operationally involved in the local store. And he or she would almost certainly be opening the account or signing the BO certification form.
Posted By: edAudit

Re: Beneficial Ownership Form Question - 06/15/21 03:31 PM

I am hoping that when the Corporate transparency act of 2020 get hashed out we can get a process/regulation that makes sense and is somewhat verifiable. As of now the Control person does not need to be a signer or have ID at the institution unless your board approved policy says it needs to be there.
Posted By: John Burnett

Re: Beneficial Ownership Form Question - 06/15/21 03:39 PM

I would hope that the regulations under the Corporate Transparency Act will call for certification and updating to be a function handled by FinCEN and the entities, and banks' involvement will be verification of ownership against the FinCEN database.

"If wishes were horses, beggars would ride."