Nichols Calls for Adjustments to KYC Rules to Facilitate PPP Loans

Temporary adjustments to “know your customer” and anti-money laundering requirements are “key” to speeding up the rate at which banks are able to provide much-needed relief to small businesses through the SBA’s Paycheck Protection Program, American Bankers Association President and CEO Rob Nichols said in a letter to Sens. Tim Kaine (D-Va.), Chris Coons (D-Del.) and Angus King (Ind.-Maine) today. Nichols emphasized that he current KYC/AML framework has required many banks to limit the application process to their existing customers.

To speed relief, Nichols recommended that for any account opened for a new customer during the national emergency by a business that already has an established bank account with any other financial institution, it will be presumed by law that the customer has been examined for the appropriate due diligence. He also called for an exemption from certain KYC/AML requirements for accounts set up for the purpose of accepting CARES Act funds.

“The clock is ticking to distribute—fairly—an unprecedented amount of funding through agency infrastructure built for much smaller volumes,” Nichols said in a letter. “For this reason, we urge policymakers to identify the appropriate balance between KYC/AML requirements and the urgent need to get funds into the communities.”