FinCEN CDD FAQ: Are there any other type of accounts that are not covered by the CDD Rule?

Compliance > BSA > FinCEN CDD/BO Rule - eff 2016
Q:  Are there any other type of accounts that are not covered by the CDD Rule?
 
A.  Yes.  Subject to certain limitations, covered financial institutions are also not required to identify and verify the identity of the beneficial owner(s) of a legal entity customer when the customer opens any of the following four categories of accounts:  
  • accounts established at the point-of-sale to provide credit products, solely for the purchase of retail goods and/or services at these retailers, up to a limit of $50,000;
  • accounts established to finance the purchase of postage and for which payments are remitted directly by the financial institution to the provider of the postage products;
  • accounts established to finance insurance premiums and for which payments are remitted directly by the financial institution to the insurance provider or broker; and
  • accounts established to finance the purchase or lease of equipment and for which payments are remitted directly by the financial institution to the vendor or lessor of this equipment.
 
These exemptions will not apply under either of the following two circumstances:  
  • if the accounts are transaction accounts through which a legal entity customer can make payments to, or receive payments from, third parties.
  • if there is the possibility of a cash refund for accounts opened to finance purchase of postage, insurance premium, or equipment leasing.If there’s the possibility of a cash refund, the financial institution must identify and verify the identity of the beneficial owner(s) either at the initial remittance, or at the time such refund occurs.
 
 
This FAQ, and others, was released in July 2016.  The 2016 FAQs were issued to assist institutions in understanding the scope of the Customer Due Diligence (CDD) requirements that were published in May 2016.   They may be found here:  https://www.fincen.gov/statutes_regs/guidance/pdf/FAQs_for_CDD_Final_Rule_(7_15_16).pdf
 

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