Daniel P. Stipano and Brendan Clegg Authored Banking Exchange Article, "Don’t Get Burned by Coming CDD Rule"
Banking ExchangeDaniel P. Stipano, Brendan Clegg
FinCEN’s issuance of the final customer due diligence (CDD) rule in May 2016 significantly altered the Bank Secrecy Act / Anti-Money Laundering (BSA/AML) compliance landscape.1
Insured depository institutions, among other covered financial entities, must comply with the rule by May 11, 2018. The rule will change banks’ day-to-day business operations by requiring risk-based procedures for conducting customer due diligence on all customers. However, beyond this, the new rule presents potential regulatory and enforcement-related consequences.
From a regulatory perspective, a bank’s failure to satisfactorily incorporate the “fifth pillar” into its BSA program could lead to supervisory action and, ultimately, to enforcement action by the federal banking agencies (OCC, FDIC, and the Federal Reserve).
Originally published in the Banking Exchange; reprinted with permission.