Fact sheet aims to clarify BSA due-diligence requirements

The NCUA, along with the Federal Reserve, FDIC and OCC on Thursday issued a joint fact sheet clarifying that bank and credit unions’ compliance efforts to meet Bank Secrecy Act due-diligence requirements for customers that are charities and other nonprofit organizations should be based on the money laundering risks posed by the customer relationship.

The fact sheet highlights the importance of legitimate charities and nonprofit organizations having access to financial services and being able to transmit funds through legitimate and transparent channels, especially in the context of responding to the coronavirus pandemic, according to a NCUA press release.

The fact sheet also clarifies that charities and nonprofit organizations do not necessarily present a uniform or unacceptably high risk of being used or exploited for money laundering, terrorist financing or sanctions violations, and that banks and credit unions should develop risk profiles that are appropriate for the risks presented by each customer.

The fact sheet also provides examples of member information that might be useful to banks and credit unions in determining risk profiles.

The NCUA noted that the fact sheet does not alter existing Bank Secrecy Act/anti-money laundering legal or regulatory requirements or establish new supervisory expectations. The fact sheet can be accessed on the NCUA website.

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