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Oct. 5 due diligence discussion set by FinCEN
WASHINGTON (9/25/12)--Proposed regulations that would require financial institutions and others to establish and maintain member and customer account monitoring policies will be the subject of an Oct. 5 roundtable discussion, the Financial Crimes Enforcement Network (FinCEN) has announced.

The roundtable discussion on customer due diligence (CDD) will take place at the Financial Industry Regulatory Authority (FINRA) in New York, N.Y., and will be held between the hours of 10 a.m. and 3 p.m. ET. Advanced registration is required, and interested parties must register by Sept. 28. Any interested parties, including finance industry representatives, may attend, FinCEN said.

Discussion will focus on FinCEN's March Advanced Notice of Proposed Rulemaking that would codify, clarify, consolidate and strengthen CDD rules. The proposal, which would apply to financial institutions, securities brokers and dealers, mutual fund brokers and dealers, futures commission merchants, and some introducing commodities brokers, addresses standards for verifying the identity of each member/customer and understanding the "nature and purpose" of each account held at an institution to assess the likelihood of suspicious activity.

The FinCEN plan, if made final, would be one part of a broader U.S. Treasury strategy to enhance financial transparency in order to strengthen efforts to combat financial crime, including money laundering, terrorist financing, and tax evasion.

FinCEN said the meeting will focus, in part, on how and when financial institutions collect "beneficial ownership" information from their customers and members and how this information is verified. FinCEN is also interested in any costs associated with obtaining this information. Roundtable attendees will also have the chance to discuss how they conduct due diligence on trust accounts, and how financial institutions identify whether their customers are or are not "shell companies."

The Credit Union National Association (CUNA) has noted that while it supports the objectives of the FinCEN proposal, the burdens and costs credit unions could face as a result would far outweigh the purported benefits to FinCEN. CUNA has suggested that FinCEN abandon the due diligence proposal and, alternatively, work with the National Credit Union Administration and other federal financial regulators to further clarify current Bank Secrecy Act and anti-money laundering rules.

The information needed to review these accounts can also be difficult to obtain, and credit unions may need to increase their staff and make costly software changes to comply with the requirements, CUNA added.

For more on the FinCEN meeting, use the resource link.
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