Risk-Based Approach to Assessing Customer Relationships and Conducting Customer Due Diligence

22-CU-08 / July 2022
Risk-Based Approach to Assessing Customer Relationships and Conducting Customer Due Diligence
To
Federally Insured Credit Unions
Subject
Risk Management
Status
Active
To
Federally Insured Credit Unions
Subj
Risk-Based Approach to Assessing Customer Relationships and Conducting Customer Due Diligence

Dear Boards of Directors and Chief Executive Officers:

The National Credit Union Administration (NCUA), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the U.S. Department of Treasury’s Financial Crimes Enforcement Network have prepared a joint statement clarifying our long-standing position that banks and credit unions must take a risk-based approach to assessing individual customer (member) risk. The attached joint statement reinforces the NCUA’s position that no single customer type automatically presents a high risk of money laundering, terrorist financing, or other illicit financial activity risk.

The regulations established in the Bank Secrecy Act (BSA) establish a risk-based approach to assessing customer relationships and conducting customer due diligence. The NCUA expects credit unions to assess the risks posed by each customer individually. Further, the NCUA advises against refusing service or discontinuing service to an entire class of customers based on perceived risk. Credit unions that comply with BSA and anti-money laundering (AML) requirements and have an effective customer due diligence program in place are well-positioned to manage customer relationships and risks appropriately, based on each individual customer relationship.

The Federal Financial Institutions Examination Council’s BSA/AML Examination Manual (Manual) identifies specific customer types to provide examiners with guidance regarding unique characteristics. The Manual is not intended to suggest that those characteristics represent a higher money laundering, terrorist financing, or illicit finance risk. It is ultimately each credit union’s decision to provide or maintain financial services to any customer.

Please contact your Regional Office or state supervisory authority if you have questions about this letter or the attached statement.

Sincerely,

/s/

Todd M. Harper
Chairman

Footnotes

Last modified on
07/06/22