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Category: Risk/Compliance

Part II: You, Me, and Everyone You Know – The Impact of FinCEN’s Beneficial Ownership Requirements

In part I of this series, we discussed the impact of the beneficial ownership rule on banks and their payment facilitator relationships. In this installment we discuss how the beneficial ownership rules apply to a bank acting as an originating depository financial institution for Automated Clearing House (ACH) transactions and its relationships with Originators, Third-Party Service Providers, and Third-Party Senders.

You, Me, and Everyone You Know – The Impact of FinCEN’s Beneficial Ownership Requirements

If you’re a payment facilitator, how much do you currently know about the owners of your sub-merchant customers? If you’re a processor, how much do you know about the owners of your payment facilitator customer’s sub-merchant customers? And if you’re a bank, how much do you know about the owners of your processor customer’s payment facilitator customer’s sub-merchant customers (who are, technically, also your customers)?

Supplement KYC Efforts Using Corporate Registration Research

As Know Your Customer (KYC) regulations become increasingly critical in the underwriting process, payment facilitators may seek to better understand high-risk merchants by collecting information separate from what is provided by the applicants themselves. Corporate registration records offer reliable, useful data that may help to paint a more complete picture than application information alone. Knowing where to look and what to look for may lead to more effective Customer Due Diligence (CDD) or Enhanced Due Diligence (EDD) efforts.

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