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Daniel P. Stipano quoted in an ACAMS article, “US Customer Due Diligence rule may trigger horizontal reviews”


Daniel P. Stipano

Daniel P. Stipano was quoted on January 24, 2019 in an ACAMS article, “US Customer Due Diligence rule may trigger horizontal reviews,” which discussed the OCC’s federal evaluation of the procedures for identifying beneficial owners against those of similarly sized institutions through a horizontal review process.  The article stated, “An OCC spokesman did not confirm whether other U.S. banks have undergone horizontal reviews of their CDD protocols, and declined to answer other questions. The regulator disclosed in September that examiners planned to conduct “horizontal risk assessments” in the near future, but did not specify what would be covered. Findings from those assessments will appear in semi-annual reports, the agency noted at the time.”

Stipano noted, “The OCC sometimes launches horizontal reviews when it suspects a problem unearthed during a particular exam may be systemic across large swathes of the financial services industry.” He also added, “Bankers whose CDD efforts do not align with what the OCC believes represent the best practices of their particular group may respond by making upgrades beyond what the rule requires. If the OCC discovers that 90 percent of banks in the midsize population use a 10-percent beneficial ownership threshold, and you’re one of those using 25 percent, what expectation is there going to be that you use 10 percent? How does the OCC enforce it?”

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