BELTWAY -

Every Last Penny Counts -

Five federal banking agencies issued a Supervisory Bulletin titled “Interagency Guidance Regarding Deposit Reconciliation Practices” (the “Guidance”). The Guidance outlines supervisory expectations for financial institutions’ investigation and resolution of “credit discrepancies,” which arise when a customer makes a deposit to a deposit account and the amount that the financial institution credits to that account differs from the total tendered for deposit. The Guidance states that financial institutions are capable of fully reconciling credit discrepancies, except in very rare cases. The agencies “expect financial institutions to adopt deposit reconciliation policies and practices that are designed to avoid or reconcile discrepancies, or designed to resolve the discrepancies such that customers are not disadvantaged."

Know Your Customer Never Ends -

After a four-year rulemaking process, FinCEN published a Final Rule on customer due diligence. The Rule requires covered financial institutions, including banks, money services businesses, broker-dealers, mutual funds, and commodities brokers, to enhance their customer due diligence procedures by collecting and verifying information about “beneficial owners,” who are the individuals who own or control the legal entity customers of the institution. The Rule adds a “fifth pillar” to the minimum requirements of an AML compliance program by requiring institutions to develop and update customer risk profiles and customer information and to conduct ongoing AML monitoring. As a concession to numerous commenters, FinCEN extended the compliance deadline to two years.