Interagency statement reiterates due diligence expectations

The federal banking agencies and the Financial Crimes Enforcement Network today issued a statement reminding banks of the risk-based approach to assessing customer relationships and conducting customer due diligence. The statement—which does not alter existing regulatory requirements or establish new supervisory expectations—emphasizes that “no customer type presents a single level of uniform risk or a particular risk profile related to money laundering, terrorist financing, or other illicit financial activity,” and that institutions operating in compliance with BSA/AML rules “are neither prohibited nor discouraged from providing banking services to customers of any specific class or type.”

“The agencies continue to encourage banks to manage customer relationships and mitigate risks based on customer relationships, rather than decline to provide banking services to entire categories of customer,” the statement noted. “In addition, the agencies recognize that banks choose whether to enter into or maintain business relationships based on their business objectives and other relevant factors, such as the products and services sought by the customer, the geographic locations where the customer will conduct or transact business, and banks’ ability to manage risks effectively.”

When developing a risk-based approach to CDD, banks should adopt procedures that enable them to understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile, and conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information, the agencies said.