Compliance Alliance Corner

Editor's Note: The following was submitted by Compliance Alliance. LBA, through its subsidiary Louisiana Bankers Service Corporation, has partnered with Compliance Alliance to give banks access to compliance-related services. Click here for more information.

Q: We have a business customer that has four owners, each owning 25%. Three are individuals and the last is a trust. We have always listed the trustee when a trust is involved in the ownership. Can you verify if this is correct? 

A:  You are correct—when an entity is owned by a trust, the guidance offered by FinCEN indicates that the bank would not be required to identify the beneficiary and could satisfy the ownership prong by collecting and verifying the identity of the trustee. Further, we offer a Compliance Minute outlining the beneficial ownership rule and its effects on trusts—click here to view. 

Did you know that filed Suspicious Activity Reports have a required retention period? 

• Financial institutions should keep a copy of any SAR filed for five years from the date of filing.  
• The original supporting documentation must be retained along with the SAR.  
• These retained documents must be readily available to FinCEN and any law enforcement agency or regulator.