Beginning on May 11, 2018, all financial institutions will be subject to a new rule under the Bank Secrecy Act intended to assist the government in the ongoing fight against money laundering and the financing of terrorism. When an account is opened on behalf of a business, or covered “legal entity”, we will be required to ask you for certain identifying information of the “beneficial owners” of the business. Please review the Frequently Asked Questions (FAQs) below that we've created to assist our customers with understanding the new requirements.
Yes, all banks, savings associations and credit unions will be covered by the regulations requiring Certifications for this type of information.
Answer: The Rule applies to covered “legal entities” which are organizations such as corporations, partnerships, limited liability companies and business trusts.
Answer: A “legal entity” customer does not include sole proprietorships, unincorporated associations, natural persons opening account on their own behalf and certain trusts.
Answer: A beneficial owner(s) must be a natural person (not a LLC or other business):
Yes, it is possible that in some circumstances the same individual might be identified under both sections (The President of ABC, Inc. who also holds a 30% equity interest).
Answer: The federal government has issued regulations requiring that before deposit, lending or safe deposit accounts can be opened for a covered entity, information must be collected about the owners of those organizations.
Answer: If you want to open an account for a covered entity, a person with signing authority will have to sign a Certification that gives the following information:
For any owners that have 25% or more in ownership, as well as for one person who controls the organization. The financial institution will also have to verify that information.
So, it may be necessary for you to get that information, put it on the form, and then bring the form along with copies of verifying documents (such as copies of the owners’ drivers licenses) back to the financial institution. An authorized signor will then need to sign the Certification on behalf of your organization.
Answer: A Certification form will be used to obtain the required beneficial ownership information. View a sample Certification form by clicking here.
Answer: Signing the Certification means that the person signing is stating that to the best of his or her knowledge, the information on the form is complete and correct.
Answer: If there are no owners with 25% or more ownership, either because all of the owners own a smaller percentage or because it is a nonprofit organization that has no owners, then you will just need the information on one person who controls or manages the organization which should be entered in the Control part of the form.
It is important to note that the information that goes on the Certification must be information regarding people rather than another organization. If another organization is the owner, then the information on the natural person(s) who own that other organization must be provided.
Here are some examples of how this form should be completed in certain circumstances:
Answer: Yes, financial institutions are subject to privacy and information security requirements that cover this information.
Answer: The Rule does not apply to existing accounts that were opened before the Rule was effective. However, if you open a new account with us for a covered legal entity, we will need to obtain a signed Certification form from you. Additionally, for certificates of deposit or loans that are renewing to covered legal entities, the bank is required to collect verification information.
Answer: No, the Certification is required every time you open another new Account. The definition of Account includes opening any new loans, deposit accounts and/or safe deposit relationships. However, it does not include single transactions like check-cashing or sales of treasurer’s checks.
View your bank statements anytime with ease by signing up for eStatements! Read more about eStatements here!
Sign up for our emails today to receive information about branch events, closings, and our great products and services.