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Final Correspondent and Private Banking Due Diligence Rules Create Burdens for Banks and Other Financial Institutions

Author: John Ensminger.

Source: Volume 19, Number 04, March/April 2006 , pp.33-45(13)

Journal of Taxation and Regulation of Financial Institutions

Abstract:

Section 312 of the USA PATRIOT Act (“the Act”) required U.S. financial institutions to establish due diligence policies, procedures, and controls reasonably designed to detect and report money laundering through correspondent and due diligence accounts. An interim final rule issued July 23 2002 has now been superseded by a final rule, with additional guidance issued in proposed form. Many institutions are covered by the due diligence requirements, including some, like mutual funds, that had a pass before. Programs must be designed with the risks of the correspondent institutions and private banking clients in mind.

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Affiliations: 1: Delta Hedge Publications.