Effective May 1, 2018

Important Information About Opening A New Account

New rules under the Bank Secrecy Act require financial institutions to obtain and verify the identification of business owners before a new account may be established. This rule applies to accounts such as checking, savings, certificates of deposit, safe deposit boxes and loans. It also applies to existing customers opening an additional account, or renewing or securing a loan.

Each time a business account is opened we are required to ask for identifying information for each individual who has beneficial ownership (of 25% or more) and one individual who has significant managerial control of the business. A person with significant managerial control is a high-level official of the legal entity who is responsible for how the organization is run, and who has access to a range of information concerning the day-to-day operations of the company (i.e., an executive, managing member, general partner, president, vice president, treasurer, or any other person who regularly performs similar functions). If you are opening an account on behalf of a business, you will also be required to provide appropriate documentation and to certify that ownership information is accurate to the best of your knowledge.

Certification of Beneficial Owners

Purpose of Collecting Additional Information

Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account in order to help the government fight the funding of terrorism and money laundering activities. Section 326 of the USA Patriot Act requires that financial institutions identify and verify the identity of the beneficial owners of all legal entity customers at the time a new account is opened. The identification and verification procedures for beneficial owners are very similar to those you currently follow as individual customers.

What Entities are Affected?

The rule applies to legal-entity businesses such as corporations, limited liability companies, partnerships, or other entities created by a filing of a public document with a Secretary of State or similar office.

What Entities are Exempt for the Requirements?

These businesses are generally exempt:

  • Sole Proprietorships
  • Trusts and estates
  • U.S. and state government agencies
  • Registered insurance companies
  • Publicly-traded companies and their subsidiaries
  • Unincorporated associations such as scout troops or youth sports leagues.

To read the full FinCEN guidance "Frequently Asked Questions Regarding Customer Due Diligence Requirements for Financial Institutions", click here.  If you have any questions or need additional information, please call your 1st Capital Bank banker or stop by your nearest 1st Capital Bank location.

 

 

 

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