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ARTICLE · 06 AUGUST 2020

FinCEN Issues New FAQ On CDD Requirements For Covered Financial Institutions

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FinCEN issued new guidance on customer due diligence requirements for covered financial institutions.

United StatesFinance and Banking
Christian Larson
Christian Larson
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FinCEN issued new guidance on customer due diligence ("CDD") requirements for covered financial institutions. FinCEN addressed the (i) collection of customer information, (ii) creation of customer risk profiles and (iii) requirement to perform ongoing monitoring of customer relationships.

Customer Information - Risk-Based Procedures

FinCEN clarified that covered financial institutions are not categorically required to (i) collect particular information beyond what is required to develop a customer risk profile, conduct ongoing monitoring and identify beneficial owners, (ii) conduct media searches or particular screenings, or (iii) collect customer information about a financial institution's clients when providing correspondent account services. However, FinCEN stated, covered financial institutions must create risk-based policies to determine whether and when to collect, update and review customer information.

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