TOPIC: Beneficial Ownership

Polling question - FinCEN Geographic Targeting Orders (GTO) concerning all cash purchases of residential real estate

VP at a bank ($5.8BUSA)
We're reviewing the impact this FinCEN Order may have on our commercial loans. Does your institution have protections requiring verification of title policy to see if title companies are properly identifying the natural persons behind shell companies used in all-cash transactions in designated GTO areas (Boston; Chicago, Dallas-Fort Worth, Honolulu, Las Vegas, Los Angeles, Miami, New York City, San Antonio, San Diego, San Francisco, and Seattle)? We're considering scenarios where we accept residential real estate as collateral. Any input would be appreciated!

    BSA/AML Conference - ThinkBIG: Fighting Financial Crime (formerly BAM+ User Group)

    Join Abrigo for the 2020 ThinkBIG: Fighting Financial Crime Conference for BSA/AML professionals. For 16 years, the BAM User Group Conference, now renamed ThinkBIG: Fighting Financial Crime, has provided industry-leading education and support. Come hear from industry leaders, law enforcement, and peers as we dive into the latest trends in suspicious activity detection, fraud trends, and regulatory expectations.

    Network with other BSA/AML and fraud banking professionals, engage with regulatory and law enforcement representatives, and expand your base of industry knowledge. This is an event you can't miss! Be prepared to Think Bigger with insights and information critical to your BSA/AML and fraud prevention programs.

    Register here!

    **We're giving away one (1) free registration now through February 7th. Earn more entries for each person you refer!
    Enter to win!

      Free Webinar | Using BSA Exam Findings to Strengthen Your Program | 1.25 CRCM Credits

      Wednesday, November 20, 2019
      2:00 PM ET / 1:00 PM CT
      Register

      Based on his firm’s experience representing over 250 banks around the country, John Geiringer, with Barack Ferrazzano Financial Institutions Group, will explore recent BSA examination findings that may be pertinent to your next exam, sharing tips on how to avoid the risk of enforcement actions at your own institution.

      In this session, you will learn:
      • Industry trends from recent exams
      • How to avoid common pitfalls and errors financial institutions encounter
      • Preparation methods and tips for upcoming exams
      • The benefits of learning from other institutions similar to yours

      Register today! 


        New Loan - Existing Relationship

        Director at a Company (USA)
             We are working on a new loan to an entity that is subject to the beneficial owner requirements. The beneficial owner has been identified as one of our existing customers. CIP was performed on the individual account in accordance with policy. However, the ID used expired in 2017. For the purpose of verifying the identity of the beneficial owner on the new loan, can I rely on the old expired DL or do I have to get a current ID since the information on file in not "up to date and accurate"? Side note - We went ahead and requested an updated DL to be on the safe side but the customer informed us that he does not have a new one. Should we allow this loan to open? What options do we have?

             Originally posted by an anonymous author with the title AVP Regulatory Compliance and Legal on 4 Mar 2019 to CBANC FI Professionals Community.

          CDD: One Year Later | Survey Request

          It's officially been one year since the CDD rule went into affect. Have you had an exam since then? What aspects of CDD and beneficial ownership, if any, did the examiner focus on? 

          We're doing a short survey on the impact CDD is having on recent exams and would appreciate if you could take a few minutes to fill it out. We're happy to share the results if you participate. 

          Thank you! 

          Survey: https://www.surveymonkey.com/r/QCJ33BN

            Case Study | Reducing Risk: Finding High-Risk Accounts & Preventing Fraud Losses in Real Time

            Case Study
            Reducing Risk: Finding High-Risk Accounts & Preventing Fraud Losses in Real Time

            Download the Case Study Now
            “With Verafin’s Private ATM Owner finder alerts, we discovered we actually had 45 [ATM owners]. It was eye opening that there were high-risk customers we didn’t know about.
            I am so glad that Verafin found these private ATM owners prior to our next exam. Not knowing … could have resulted in a finding, or worse, a fine for the bank.”

            Stacey Iverson, BSA and Fraud Officer, Bell Bank ($5.4B)
            When an examination in early 2018 reinforced the fact that Bell Bank ($5.4B) needed a more robust program for customer due diligence (CDD), enhanced due diligence (EDD) and identifying high-risk customers, the institution turned to Verafin to get prepared for Ultimate Beneficial Ownership, and strengthen their high-risk customer management and CDD/EDD processes.

            In this case study, you’ll read how BSA and Fraud Officer Stacey Iverson, and her team at Bell Bank, have increased confidence going into their next exam, thanks to the extra level of scrutiny that Verafin’s robust CDD/EDD solutions provide for identifying and managing their high-risk customers.

            Download the Case Study Now

              Commercial Real Estate Loans and C&I Loans

              Chief Compliance Officer at a bank ($865MUSA)
              A Bank enters into an agreement with a company to originate both CRE and C&I Loans. The Bank is paying fees to the company for the introduction and they also provide a full loan package with their credit underwriting analysis, which includes KYC, appraisals, Beneficial Ownership, Credit Reports, Loan Application etc,   The Bank has the option to approve and close the loan (after Bank's underwriting) or determine that the particular customer/loan is not in line with the Bank's guidelines.  The Bank funds the loan and services the loan after closing.  There are no consumer loans of any sort considered. 

              With this limited information, does anyone have any insight as to what licenses the company (Delaware corp) must have in order to engage with regulated financial institutions have in this capacity?  Are they considered a Real Estate firm or a Loan Broker Dealer?  

              If anyone has any insight I would greatly appreciate it - even if it is just professional opinion.  

              Thank you for any feedback!

                Blog | Optimizing high-risk customer management and ongoing due diligence

                Blog
                Optimizing high-risk customer management and ongoing due diligence
                How end-to-end AML technology improves the effectiveness of high-risk customer monitoring in a complex BSA/AML risk environment
                Read the full blog now

                An already challenging BSA/AML compliance risk environment continues to grow in complexity. When FinCEN’s Final Customer Due Diligence (CDD) Rule came into effect in May 2018, covered FIs were required to update policies and procedures to ensure Beneficial Ownership information is collected for new relationships on a go-forward basis.

                In this blog, we outline how a risk-based approach to compliance goes far beyond collecting information at account opening, and why FIs must understand high-risk customer relationships, such as ATM Owners, MSBs, MRBs, NGOs, etc., throughout their lifecycle.

                Read about the challenges of High-Risk Customer Management and how a technology platform that uses Intelligent Categorization can help FIs establish an end-to-end, risk-based approach to BSA/AML compliance that includes Identification, Risk Stratification, EDD Review Workflows, and ongoing Surveillance for powerful, more efficient due diligence for higher-risk customers.

                Read the full blog now

                  Case Study | Rich Data Provides Rich Rewards for Fraud Team

                  Reducing Risk
                  Finding High-Risk Accounts & Preventing Fraud Losses in Real Time
                  “With Verafin’s Private ATM Owner finder alerts, we discovered we actually had 45 [ATM owners]. It was eye opening that there were high-risk customers we didn’t know about. I am so glad that Verafin found these private ATM owners prior to our next exam. Not knowing … could have resulted in a finding, or worse, a fine for the bank.”
                  Stacey Iverson, BSA and Fraud Officer
                  Bell Bank, ND, $5.4B
                  Download the case study now

                  When an examination in early 2018 reinforced the fact that Bell Bank ($5.4B) needed a more robust program for customer due diligence (CDD), enhanced due diligence (EDD) and identifying high-risk customers, the institution turned to Verafin to get prepared for Ultimate Beneficial Ownership, and strengthen their high-risk customer management and CDD/EDD processes.

                  In this case study, you’ll read how BSA and Fraud Officer Stacey Iverson, and her team at Bell Bank, have increased confidence going into their next exam, thanks to the extra level of scrutiny that Verafin’s robust CDD/EDD solutions provide for identifying and managing their high-risk customers. 

                  Download the case study now

                    7 of the most confusing areas of compliance, explained! (plus lots of resources)

                    Confounded by Community Development? Perplexed by UDAAPs? Baffled by Beneficial Ownership? Flummoxed by Fair Lending discrimination? If so, you're not alone! Here are 7 compliance topics that are widely regarded as the most complex - with tips, tricks, and lots of great resources to help make them easier to manage. Read the post here: https://www.trupointpartners.com/blog/most-confusing-areas-of-banking-compliance-for-compliance-pros


                      Another Nuance of Exceptive Relief

                      Another little nuance of Exceptive Relief has revealed itself. In a previous post, we discussed how the narrow definition of certificates of deposits within the guidance excludes no-penalty CDs or those in which deposits may be made during the term of the CD. To reiterate: If you offer a no-penalty CD or allow deposits during the term of the CD, your product would not qualify for the exceptive relief and you would have to address beneficial ownership requirements for those established prior to May 11, 2018 and those originated thereafter.

                      Discussion of this exclusion led us to another question: What if you have a CD that has an early withdrawal penalty and the customer cannot make deposits during its term, BUT the customer can make a deposit during the grace period between maturity and renewal? Would that product qualify for exceptive relief? No. Even if the customer does not make a deposit during that grace period, the simple fact that your product allows for it excludes it from exceptive relief.

                        Blog | Optimizing high-risk customer management and ongoing due diligence

                        How end-to-end AML technology improves the effectiveness of high-risk customer monitoring in a complex BSA/AML risk environment

                        As we move through 2018, an already challenging BSA/AML compliance risk environment continues to grow in complexity with financial institutions (FIs) facing the formidable task of performing ongoing due diligence on customers within high-risk categories.

                        The looming FinCEN Final Customer Due Diligence (CDD) Rule, and its requirement that covered FIs adapt their policies and procedures to ensure Beneficial Ownership information is collected for new relationships on a go-forward basis, is a top concern for BSA/AML professionals. Gathering this information is just the beginning.

                        Our latest blog outlines how a risk-based approach to compliance goes far beyond collecting information at account opening. FIs must understand high-risk customer relationships, such as ATM Owners, MSBs, MRBs, NGOs, etc., throughout their lifecycle — from identification to ongoing activity monitoring.

                        Read about the challenges of high-risk customer management and how technology can play a key role in improving your efforts to implement an efficient and effective risk-based approach.

                        Read the full blog: https://verafin.com/2018/03/optimizing-high-risk-customer-management-ongoing-due-diligence/?src=CBANC

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                          Exceptive Relief FACT SHEET

                          Taking it right up to the deadline, FinCEN issued Exceptive Relief from beneficial ownership requirements for auto-renewing products such as CDs, commercial lines of credit and credit cards, and safe deposit boxes. Loan modifications are also addressed in the Rule. The Rule itself it pretty straight-forward, but we developed the attached Fact Sheet to walk you through it quickly and provide some guidance on implementation.

                            Free Webinar: Tips To Improve Your CDD/EDD Program

                            Tuesday, August 28th - 1:00 PM CT

                            Now that the new Beneficial Ownership and Customer Due Diligence changes have gone into effect, are you confident in your CDD/EDD program or are you feeling the pressure of falling behind on your reviews? In this webinar learn how the Banker’s Toolbox Professional Services team of CAMS-certified consultants can help you improve your CDD/EDD program and help your organization become more efficient with ongoing due diligence. Let us be your partner in success and help you tackle the work required to comply with regulatory guidelines and keep up-to-date on industry trends.

                            Key learning objectives:

                            • Understand the importance of keeping up with due diligence reviews in order to comply with regulatory guidelines
                            • Learn how Banker’s Toolbox Professional Services Team can help you and your institution enhance your CDD/EDD program
                            • Explore examples of how our experts have helped financial institutions to become more efficient with their due diligence reviews and improve their BSA program

                            Register here.

                              FinCEN Extends Exceptive Relief of Beneficial Ownership Requirements

                              The 90-day limited exceptive relief FinCEN issued to financial institutions following the implementation of the updated Beneficial Ownership/CDD rule was set to expire on August 9. Yesterday, FinCEN issued a 30-day extension of the exceptive relief, now set to expire on September 8. As a reminder, this is specifically aimed at certain financial products and services that automatically rollover or renew (CDs, loan accounts, etc.) that were established before the original Beneficial Ownership deadline of May 11.

                              With the extension, FinCEN is expected to “determine whether and to what extent additional exceptive relief may be appropriate” for these financial products and services. This exception may be “extended, modified or revoked at FinCEN’s discretion” so FIs should still have policies and procedures in place to deal with these products.

                              If you have questions regarding the exemption, or your CDD/EDD Program let us know. Banker’s Toolbox can help ensure your program is compliant and that you are ready to meet your examiners at the door with a confident smile.

                                Free Webinar: Tips To Improve Your CDD/EDD Program

                                Tuesday, August 28th - 1:00 PM CT

                                Now that the new Beneficial Ownership and Customer Due Diligence changes have gone into effect, are you confident in your CDD/EDD program or are you feeling the pressure of falling behind on your reviews? In this webinar learn how the Banker’s Toolbox Professional Services team of CAMS-certified consultants can help you improve your CDD/EDD program and help your organization become more efficient with ongoing due diligence. Let us be your partner in success and help you tackle the work required to comply with regulatory guidelines and keep up-to-date on industry trends.

                                Key learning objectives:

                                • Understand the importance of keeping up with due diligence reviews in order to comply with regulatory guidelines
                                • Learn how Banker’s Toolbox Professional Services Team can help you and your institution enhance your CDD/EDD program
                                • Explore examples of how our experts have helped financial institutions to become more efficient with their due diligence reviews and improve their BSA program

                                Register here.