Q: BSA Issues for New Customers. What are a financial institution’s BSA requirements when a financial institution is approached by a non-customer (potential new customer relationship) regarding the Small Business Administration’s Paycheck Protection Program (PPP)?
A: Treasury’s PPP FAQs (#25) and FinCEN’s PPP FAQs (#2) address BSA requirements, relative to the PPP, for lenders with new customers. For new customers, the lender’s collection of the following information from all natural persons with a 20% or greater ownership stake in the applicant business will be deemed to satisfy applicable BSA requirements and FinCEN regulations governing the collection of beneficial ownership information: owner name, title, ownership %, TIN, address, and date of birth. If any ownership interest of 20% or greater in the applicant business belongs to a business or other legal entity, lenders will need to collect appropriate beneficial ownership information for that entity.
Decisions regarding further verification of beneficial ownership information collected from new customers should be made pursuant to the lender’s risk-based approach to BSA compliance.
This Q&A was contained in the Frequently Asked Questions for Financial Institutions Affected by the Coronavirus Disease 2019 (Referred to as COVID-19) – As of March 3, 2021 (which may be updated from time to time). This may be found on the FDIC’s website here: https://www.fdic.gov/Coronavirus/faq-fi.pdf.