Opening or making changes to a business account? Here's what you need to know about the impact of FinCEN’s new customer due diligence rules for beneficial ownership.
In the fight against financial crimes, Federal regulation now requires financial institutions to obtain, verify, and record information about the beneficial ownership of legal entity* customers opening or maintaining an account. The purpose of this regulation is to help protect the country's financial system against money laundering, corruption, and the like. This means that each time an account is opened, or certain changes are made on behalf of a legal entity, we will request information that identifies the beneficial owner(s) and controlling person of the legal entity.
Frequently Asked Questions
What is FinCEN, and what is their purpose?
- FinCEN, or the Financial Crimes Enforcement Network, is a bureau of the U.S. Department of the Treasury.
- FinCEN’s mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.
- FinCEN carries out its mission by receiving and maintaining financial transactions data; analyzing and disseminating that data for law enforcement purposes; and building global cooperation with counterpart organizations in other countries and with international bodies.
What do I need to know about Beneficial Ownership?
- The new regulation impacts all legal entities opening or maintaining accounts at any bank, credit union, or other “covered financial institution”.
- The rule applies to all new accounts, including checking, savings, certificates of deposit, safe deposit boxes, loans, and credit cards.
- The person opening the account on behalf of a legal entity will need to identify and attest to all beneficial owner(s) that meet specific requirements, as well as a controlling person (e.g., Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President or Treasurer).
- Heartland Bank will collect information regarding the beneficial owner(s) and controlling person of legal entities at the time a new account is opened or when certain information changes, even if a person has an existing relationship with the financial institution.
Who is considered a beneficial owner?
“Beneficial ownership” consists of two roles, referred to as "prongs" in the rule:
1) Ownership prong: A natural person who, directly or indirectly, owns 25 percent or more of the equity interests of a legal entity.
2) Control prong: A person with significant managerial control or influence over a legal entity customer (e.g., Chief Executive Officer, Chief Financial Officer, Managing Member, General Partner, etc.).
- For every legal entity customer subject to beneficial ownership, you must identify one control person. NOTE: It is possible that the control person may also be a beneficial owner.
What information is required?
- Name, address, date of birth, social security number and a copy of a driver's license or other bank-approved identification are required for all identified beneficial owners.
- Additionally, the person opening the account on behalf of a legal entity is required to certify that the information provided is true and accurate to the best of his/her knowledge by signing the Certification of Beneficial Owners of Legal Entity Customers document.
- As always, we will treat all information collected with the same standard of privacy that we have always maintained.
What if I don't have the required information at the time of account opening?
Unfortunately, we will be unable to open the account for you without the required information.
Is the information I provide for beneficial ownership used for marketing to non-bank customers?
No. This information is not used for marketing purposes.
Is Heartland Bank the only bank that is required to collect beneficial ownership information?
No. All banks, credit unions, and other covered financial institutions as defined in the rule are required to comply with the beneficial ownership information collection regulation.
Does the regulation require Heartland Bank to collect beneficial ownership information for my personal accounts?
No. The regulation only applies to applicable legal entity* accounts.
*Legal entity includes corporations, limited liability companies, and other entities created by a filing of a public document with the Secretary of State or similar office, a general partnership, and any similar business entity formed in the U.S. or a foreign country.
Legal entity does not include sole proprietorships, unincorporated associations, entities listed on the NYSE or NASDAQ, trusts (unless created by a filing with the Secretary of State), or natural persons opening accounts on their behalf.