Q: Under the Customer Due Diligence Rules, Must Legal Entity Customers Certify Beneficial Owners for Financial Product Renewals?
A: Yes. Except under certain circumstances, each time a loan is renewed or a certificate of deposit is rolled over, a new account is established.
Thus, for financial services or products established before May 11, 2018, covered financial institutions must obtain certified beneficial ownership information at the time of the first renewal following that date. However, at the time of each subsequent renewal, if the legal entity customer and the product remains the same, and the customer certifies that the previously obtained beneficial ownership information is correct, and the financial institution has no knowledge of facts that would reasonably call into question the reliability of the information, the financial institution would not be required to collect the beneficial ownership information again.
For more information, see question 12 in the April 3, 2018 FAQs issued by FinCEN here.
Birrenkott is WBA assistant director - legal. For legal questions, please email the WBA legal team.
Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution's attorney for special legal advice or assistance.