U.S. Bank Supervisor Sees Weaknesses in Compliance With Due Diligence Rule
07 Feb 2020

Some banks have failed to put in place adequate policies to comply with a rule that requires them to identify the owners of corporate accounts, a senior regulator said Thursday.

The customer due-diligence rule requires financial institutions to collect information such as names and addresses for the beneficial owners of certain businesses. The rule, which took effect in May 2018, targets anonymous shell companies, or limited liability companies with no significant assets or operations that can be used as a vehicle to launder money.

Grovetta Gardineer, senior deputy comptroller for bank supervision policy at the Office of the Comptroller of the Currency, said national bank examiners have recently observed weaknesses in compliance.

“What we are seeing, and we have cited some violations here, are not having the policies and procedures in place that really reflect what the regulation expects or what we believe is important from a supervisory perspective,” Ms. Gardineer said during an appearance at an anti-financial crime conference.

By Kristin Broughton, The Wall Street Journal, 6 February 2020

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