FinCEN's CDD Rule - Fifth Prong of the AML Program
Jim George is an independent consultant to banks focusing on issues of risk and compliance, AML, and fraud. He brings over 25 years as a consultant to major banks in Associate Partner and Principal roles at PriceWaterhouseCoopers Consulting, IBM Consulting in Bank Risk and Compliance, and Andersen Consulting (now Accenture). He has also been SVP Operations for a major Insurance Company providing insurance outsourcing services to the banking industry. Jim's work has included projects in AML and fraud investigation, prevention, identity/KYC issues, and related systems. His background includes work in bank operations and payments strategy, systems, reengineering, and quality improvement.
FinCEN has issued substantial new AML requirements focused on a major expansion of Know Your Customer into what is now Customer Due Diligence, CDD. It goes far beyond knowledge of the Customer Legal Entity to the Beneficial Owner of that entity and its Controlling Persons. It is focused beyond the initial customer acceptance step, requiring updating and ongoing monitoring against baseline “normal” activity for the customer type. It is very unlikely that many banks already comply with these requirements.
- Why this expansion of regulations?
- Purposes of the new regs
- Three covered entity types
o Customer legal entity
o Beneficial owners
o Controlling persons
- The existing 4 prongs/pillars of AML per the BSA
- Overview of the new 5th prong/pillar
- Triggers that caused this expansion of regulations
- Purposes, per FinCEN
- New Requirements
o Risk profiles
o Baseline/normal transactions
o Transaction monitoring
Who Should Attend
- Credit Unions
- Retail Banking Leaders
- Risk and Compliance Officers
- AML and Financial Crimes Departments
Why Should You Attend
The new requirements are formidable. They will impact commercial, small business, private, and international banking areas of the Banks as well as compliance officers and areas currently performing KYC tasks. New research will be required on new entities never addressed before in customer acceptance. Follow-up will require new updating requirements and a strong linkage of monitored transactions versus baseline.