National Credit Union Administration (NCUA) 

Agencies Request Comment on Anti-Money Laundering/Countering the Financing of Terrorism Proposed Rule 

The NCUA and other federal financial institution regulators issued a joint rule to update their programs to mirror the proposed AML/CFT rules that FinCEN issued on June 28, 2024. 

The proposal would update section 12 CFR 748.2 and require credit unions to establish effective, risk-based, and reasonably designed AML/CFT programs. The programs would incorporate: 

• Risk assessment process as the basis of the credit union’s AML/CFT program. The risk assessment process must take into account: 

  • The AML/CFT Priorities issued by FinCEN; 

  • Consideration of credit union’s business activities and the risks of money laundering, terrorist financing or other illicit finance activity of the credit union’s business activities; and 

  • Reports filed by the credit union (SARs and CTRs) 

• Internal policies and procedures reasonably designed to manage and mitigate money laundering and the financing of terrorism base on the outcomes of the risk assessments; 

• Designate one or more qualified individuals to be responsible for coordinating and monitoring day-to-day compliance; 

• Include an ongoing employee training program; 

• Include independent, periodic AML/CFT program testing conducted by qualified parties; 

• Include appropriate risk-based procedures for conducting ongoing customer due diligence: 

  • Understanding the nature and purpose of customer relationships; and 

  • Conducting ongoing monitoring. 

The board of the credit union must approve the credit union’s program. 

Interagency Statement on the Issuance of the AML/CFT Program Notices of Proposed Rulemaking 

The NCUA, along with the other federal financial institution regulators, issued a joint statement related to the issuance of proposed rules to update the regulators’ rules related to BSA compliance programs. The interagency statement describes key changes to the AML/CFT programs, including the risk assessment process. 

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Consumer Financial Protection Bureau (CFPB) 

CFPB Warns Against Intimidation of Whistleblowers 

The CFPB issued a circular to law enforcement agencies and regulators explaining how companies may be breaking the law by requiring employees to sign broad nondisclosure agreements that could deter whistleblowing. The circular explains how imposing sweeping nondisclosure agreements that do not clearly permit communication with law enforcement may intimidate employees from disclosing misconduct or cooperating with investigations. This could impede investigations and potentially violate federal whistleblower protections. 

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Financial Crimes Enforcement Network (FinCEN) 

FinCEN Issued Request for Comment on Information to be Collected from Authorized Recipients Requesting Beneficial Ownership Information 

FinCEN released a notice of information collection and request for comment related to information that will be provided by entities that request beneficial ownership information (BOI) from FinCEN. Per the notice, financial institutions requesting information from FinCEN would provide: 

Financial institutions proposed data fields and certification:  

Search for Beneficial Ownership Information  

• Reporting company legal name  

• Reporting company tax identification number type (select one from list of options)  

  • EIN (Employer Identification Number)  

  • SSN/ITIN (Social Security Number / Individual Taxpayer Identification Number) 

  • Foreign (if “foreign” is selected, a drop down menu for “country/jurisdiction” populates automatically; select from list of countries/jurisdictions)  

• Reporting company tax identification number  

*Certification  

I certify on behalf of the financial institution making this request that: (1) this information is requested to facilitate the financial institution’s compliance with customer due diligence requirements under applicable law, as defined in 31 CFR 1010.955(b)(4)(i); (2) the financial institution has obtained and documented the consent of the reporting company to request this information from FinCEN; and (3) the financial institution has fulfilled all other requirements of 31 CFR 1010.955(d)(2). 

[Select “I agree”] 

League InfoSight Highlight: New CFPB Registry Applies to CUSOs and Privately Insured Credit Unions! 

The CFPB’s final rule on nonbank covered entities, effective Sept. 16, 2024, requires these entities to report certain information through a CFPB established registry. It’s important to note that federally insured financial institutions are explicitly excluded from this rule; however, based on the definition of a “covered nonbank,” certain affiliates of federally insured credit unions, such as credit union service organizations (CUSOs) and privately insured credit unions would be covered under the rule and required to report through the registry. Below is an excerpt from the commentary of the final rule: 

The Bureau declines to finalize an exemption for CUSOs in § 1092.201(d)'s definition of “covered nonbank.” Unlike insured credit unions, which are exempt from the definition, CUSOs are not directly subject to the NCUA's full examination and enforcement authority and are not chartered or insured by the NCUA. And while presently the NCUA requires a federally insured credit union investing in or lending to a CUSO to obtain a written agreement requiring the applicable CUSO to “provide the NCUA with complete access to its books and records and the ability to review the CUSO's internal controls” and to supply the NCUA with “operational and financial information” via a CUSO Registry, the NCUA nevertheless has previously emphasized in Congressional testimony that “this does not provide access to examine all of the CUSO's operations.”  The Bureau concludes that requiring covered nonbanks that are CUSOs to register will provide valuable information to the Bureau and others regarding risks such covered nonbanks may present to consumers. Among other things, if—as the Bureau intends—the Bureau publishes registry information, requiring CUSOs that qualify as covered nonbanks to register with the nonbank registry will facilitate credit union due diligence in using a CUSO to provide services to the credit union in connection with the offering or provision of consumer financial products and services.  

The Bureau also notes that the credit union exemption provided under § 1092.201(d)(1) applies only to insured credit unions, as that term is defined by § 1092.101(a), which in turn defines the term “insured credit union” to have the meaning given to that term in the CFPA. Thus, this exemption does not apply to credit unions, such as certain uninsured or privately insured credit unions, that do not meet the definition of “insured credit union” under the CFPA and the final rule. Such credit unions must comply with the rule's registration and other provisions with respect to covered nonbanks and supervised registered entities where they would otherwise be applicable.  

While required to report, there may be some exemptions to reporting certain information like the annual written statement, if the CUSO and/or privately insured credit union have less than $5 million in annual receipts. 

Privately insured credit unions and CUSOs can read more about the requirements of the final rule here:  

• Executive Summary of the Nonbank Registration of Orders Rule 

• Final Rule 

Please keep your eye out for more information in InfoSight 

Brad Willett 

Director of Compliance & Regulatory Affairs, Michigan Credit Union League 

Glory LeDu 

CEO, League InfoSight and CU Risk Intelligence 

LIS Webinar: Cyber Incident Content Review 

Join us on Tuesday, July 30, 2024, at 2 p.m. ET for our upcoming webinar where we will dive into the latest content updates for RecoveryPro! The new content includes a comprehensive Cyber Incident section, developed to address NCUA’s heightened emphasis on cyber events and Business Continuity Planning (BCP).  

The new content includes procedures for detecting, containing, and recovering from cyberattacks, along with communication strategies for notifying key stakeholders.  

You do not need to subscribe to RecoveryPro to attend, but registration is required. 

Register now to secure your spot! 

Whether you are a federal or state-chartered credit union, there are state laws that impact your operations. The most efficient and quickest way to find those laws is through InfoSight. This member benefit provides you with access to applicable state content for all 50 states, without you needing to search through tons of random online sources. Stop wasting time trying to research when InfoSight has aggregated all the information your credit union needs to stay compliant in an ever-changing and evolving federal and state environment. 

CFPB to Distribute More Than $53 Million to Consumers Harmed by BrightSpeed Solutions 

CFPB Report Highlights Junk Fees Charged by School Lunch Payment Platforms 

Looking for a Job? Spot the Scams 

Student Loan Scammers Speak Your Language 

Scammers Target Young Adults on Social Media with Fake Check Scams  

July 30, 2024: Cyber Incident Content Review 

Aug. 8, 2024: OFAC Interim Final Rule Requiring Use of Electronic Reporting System 

Aug. 12, 2024: Comments Due CFPB Proposed Rule Concerning Medical Debt and Credit Reports

Aug. 14-15, 2024: Fraud Symposium

Sept. 3, 2024: Comments Due – FinCEN AML/CFT Program Amendments 

Sept. 9, 2024: Comments Due – CFPB Proposed Mortgage Servicing Amendments 

If we open a new membership account conditioned on additional information, and we are ultimately unable to verify the identity of the member, are we required to go through the formal expulsion process? 

No. The credit union is not required to go through a formal expulsion process if the account is conditionally opened due to identity verification. 

For your individualized login, select your state below. 

If you have questions about this communication, contact us at 800.546.4465, or via our shared email inbox at compliance@gowest.org.

Have a great weekend!

Your GoWest Compliance Team, 

Copyright © 2023 GoWest Credit Union Association. All Rights Reserved.

Mailing Address:
GoWest Credit Union Association, 18000 International Blvd, Ste. 1102, SeaTac, WA 98188, United States
1.800.995.9064

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