Since the May 11, 2018, implementation of the new CDD Rule, a number of significant events have taken place: a series of updates from FinCEN; public statements by FinCEN’s new director to covered financial institutions that the agency understands their implementation challenges; and the issuance of new guidance from the FFIEC. Of note, the Ninth Circuit Court of Appeals ruled in March that the FFIEC manual was more than simply a guide that covered financial institutions should follow.
FinCEN appears to recognize the difficulty of implementing a new rule with such profound effects on the anti-money laundering (AML) operations of covered financial institutions, even with a two-year implementation period. For example, FinCEN has placed a 90-day “excepted relief” on a component of the CDD Rule and FinCEN does not plan to play a “gotcha game” as it oversees the industry’s compliance with the new regulations.
The FFIEC issued new examination procedures on the CDD Rule in its Bank Secrecy Act/Anti-Money Laundering Examination Manual (FFIEC Manual). The manual is provided to assist bank examiners by creating examination procedures to test the effectiveness and sustainability of a covered financial institution’s compliance with Bank Secrecy Act (BSA)/AML regulations and for compliance with the new CDD Rule.
In this article, our experts break down the significant changes, guidance, and speeches regarding the new CDD Rule since the implementation date on May 11, 2018.