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Be Prepared for Compliance with FinCen’s Customer Due Diligence Rule

Making A Complex Rule Simple

Now that FinCEN’s CDD Rule is fully applicable, covered financial institutions should be monitoring and assessing how their revised policies, procedures, and controls are in compliance with the rule – and if necessary consider what changes need to be made and what concerns and questions they have for the regulators. As FinCEN Director Kenneth Blanco said in recent testimony before the Subcommittee on Terrorism and Illicit Finance, “FinCEN will continue to engage industry groups and other stakeholders to understand any specific unintended challenges that the rule may present and, if necessary, FinCEN will provide further guidance. Likewise, we will work with regulatory and law enforcement partners to understand and address any compliance issues appropriately.”

In conducting this review, covered financial institutions should consider the following:

  • What are you doing to test the efficacy of the policies, procedures, controls, and systems enhancements to make sure you are complying with the rule?
  • What questions are you receiving from compliance, sales, and operations on your new/enhanced policies, procedures, and controls?
  • Have there been any unanticipated complications applying the rule’s requirements?
  • Do you have plans to conduct refresher training?
  • What are you doing to stay abreast of regulator activity (e.g., in the past few weeks, FinCEN issued new guidance and provided some exemptive relief)?
  • Do you have an upcoming exam scheduled?


Learn More 

Guidehouse’s team of experts includes former financial regulators who have developed, drafted, implemented, investigated and prosecuted rules and regulations to combat money laundering, terrorist financing and other serious crimes as well as former financial institution compliance professionals who have first-hand experience in understanding how such rules and regulations are most effectively operationalized. Some of our relevant service offerings, include:

  • Assistance in responding to regulatory inquiries
  • Remediation
  • Targeted Testing
  • Updating Risk Assessment
  • Employee/Board Training


Alert: FinCEN Frequently Asked Questions Regarding Customer Due Diligence Requirements for Financial Institutions

On April 3, 2018, the Financial Crimes Enforcement Network (FinCEN) issued its long-awaited second set of Frequently Asked Questions (FAQs) to assist covered financial institutions in understanding the scope of the Customer Due Diligence for Financial Institutions (CDD Rule). FinCEN’s FAQs address 37 of the most frequently asked questions. The vast majority of the questions are grouped under broad topics. We summarize what we believe to be the most important aspects of the FAQs and topics, but financial institutions should consult the FAQs for more detail. Read now.  

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