Guidelines for Business Accounts

Question:

Are there specific guidelines in BSA or with the FFIEC where the bank needs to maintain information related to providing business ownership on business accounts held with a bank, owning 25% or more of a business? Is there a CIP requirement?

Answer:

Interagency Guidance published in March, 2010 indicates that banks should identify "beneficial owners" for "higher risk" customers. Although the guidance purports to clarify and explain previous regulatory pronouncements, it clearly introduces new regulatory expectations in situations other than private banking and foreign correspondent accounts.

The guidance indicates that identifying beneficial owners falls under due diligence responsibilities. CIP is not mentioned and would not apply in most instances. As you will note, the guidance does not mention a percentage of ownership that would serve as a threshold. My suggestion is 10% plus.

First published on BankersOnline.com 1/10/11