In circumstances where the applicant’s current address does not include a five-digit zip code, e.g., the applicant currently lives overseas, making it impossible to generate a list based on the zip code of the applicant’s current address, the lender may use the five-digit zip code of the property securing the mortgage to generate the list.
(Answer provided July 2019.)
• • •Q An auditor cited my bank for a violation for using the business address of the beneficial owners listed on the beneficial ownership certification form. In the process of verifying the identity of the individuals listed, the bank received copies of their driver’s license, which listed their home addresses, not the business address. The auditors cited the bank because the address on the driver’s license did not match the address on the certification form. Was the auditor correct? A No. The law does not require that the information on the identification document and the certification form match. Moreover, it does not mandate use of the individual beneficial owner’s residential address.
In identifying the beneficial owner, at a minimum, banks must obtain the following identifying information for each individual beneficial owner of a legal entity customer:
A residential or business street address, or if the individual does not have such an address, an Army Post Office (APO) or Fleet Post Office (FPO) box number, the residential or business street address of next of kin or of another contact individual, or a description of the customer’s physical location. (See 31 CFR 1010.220(a) (2)(i)(3).)
In addition, banks may rely on the information supplied by the legal entity customer regarding the identity of its beneficial owner or owners, if it has no knowledge of facts that would reasonably call into question the reliability of such information. Assuming the business address is correct, that fact that an identification had a residential address does not appear to call that information into question.
Finally, banks need not establish the accuracy of every element of identifying information they obtain but must verify enough information to form a reasonable belief that they know the true identity of the beneficial owner(s) of the legal entity customer. The bank’s procedures for verifying the identity of the beneficial owners must describe when it uses documents, non-documentary methods, or a combination of methods. (Answer provided July 2019.)
• • •Q The Federal Housing Finance Agency postponed the optional use of the redesigned Uniform Residential Loan Application that was scheduled to begin on July 1, 2019. Do you have an update about the redesigned URLA? A FHFA has delayed the optional use period for the redesigned URLA. FHFA has advised that they will revise the effective date of the form and provide an updated version later. (Answer provided July 2019.)
Answers are provided by Leslie Callaway, CRCM, CAFP, director of compliance outreach and development; Mark Kruhm, CRCM, CAFP, senior compliance analyst; and Rhonda Castaneda, CRCM, senior compliance analyst, ABA Regulatory Policy and Compliance. Answers do not provide, nor are they intended to substitute for, professional legal advice. Answers were current as of the response date shown at the end of each item.