Perhaps you’ve heard or read in the news that beginning May 11th, 2018 all U.S. financial institutions will be subject to slightly new rules under the Bank Secrecy Act. This change will assist the government in the investigation and prosecution of financial crimes such as money laundering, tax evasion and corruption. This sounds complicated, but we’re here to walk you through it step by step.

What does this mean?

When a legal entity (business) wants to open a new account or apply for a new service, the bank will now be required to obtain, verify, and record information about the “beneficial owners” and the individuals who control that business. You may also be asked to provide this information at the time an existing product renews or rolls over – like a CD or a loan.

What information will now be required?

Specifically, the bank is required to obtain “personally identifying information” such as name, date of birth, Social Security number (U.S. Citizens), passport number and country of issuance (for foreign individuals), residential address, and identification documentation for:

  • Each individual who, directly or indirectly, owns 25% or more equity interests of the entity and would therefore be considered a beneficial owner; and
  • One individual that has significant responsibility for controlling or managing of the entity, such as a senior executive officer, senior manager, etc.

Frequently, the beneficial owners or controlling individuals aren’t the ones opening a new account; rather, they have authorized a representative who is able to open a new business account on their behalf. The representative will need to provide proof of identity (such as a valid driver’s license), and he/she will be required to certify that the information provided regarding beneficial ownership is true and accurate to the best of their knowledge.

Tips to come prepared

For the best experience when opening a new business account or applying for a new service, we recommend you bring the necessary personally identifying information listed above for the beneficial owner(s) as well as a photocopy of their driver’s license(s).

It can be very helpful to maintain all of your documents and records and make regular updates to the file, so you know you’ll be ready the next time as well.

If you ever have any questions or would like to learn more, please call us any time at 800-860-8821. For you 24/7.