Are your CDD Policies Ready for Your Next Exam?

Last August, the National Credit Union Administration (NCUA) issued Supervisory Letter (SL No. 18-01) to address credit unions' compliance with the new BSA Customer Due Diligence and Beneficial Ownership Rules.

With this letter, NCUA stated that credit unions could expect that "field staff would not identify non-compliance as a significant BSA violation, as long as credit unions were making a good faith effort to comply with the new rules." Credit unions were to expect this reprieve through the end of 2018. Well, we are now into 2019, and NCUA has listed "in-depth reviews of BSA/AML policies and procedures and assessing compliance with the customer due diligence regulation" as one of the agency's supervisory priorities for this year.

As you prepare for your next exam, some items you should consider include:

  • Does your written BSA compliance program include Customer Due Diligence and Beneficial Ownership Identification and Verification?
  • Have you established an adequate Customer (member) Due Diligence (CDD) Program?
  • Does your CU have effective procedures for developing member risk profiles that identify the specific risks of individual members or categories of members? 
  • Are your risk-based CDD policies, procedures, and processes commensurate with your credit union's BSA/AML risk profile, with increased focus on higher risk members? 
  • Do your procedures include identifying members that may pose a higher risk for money laundering or terrorist financing and whether and/or when, on the basis of risk, it is appropriate to obtain and review additional member information?

Want more information on customer due diligence and bank secrecy act training for your staff and volunteers? Email Nicola Foggie at