Risks & Rules AGENCY ACTIONS SAFETY & SOUNDNESS COMPLIANCE COMPLIANCE CORNER CDD makes waves One year from now, banks will need to be compliant with expanded requirements for customer due diligence. What does this mean for the compliance function at your community bank? By Mary Thorson Wright O n May 11, 2018, new Financial Crimes Enforcement Network (FinCEN) rules become effective that expand and strengthen customer due diligence (CDD) requirements for banks and other financial institutions. Customer due diligence policies and procedures for all customers, but particularly for those who represent a higher risk of money laundering and terrorist financing, are cited as the cornerstone of a strong Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program. The current state of a community bank's Customer Identification Program (CIP) determines to what extent measures will need to be taken to address the specific requirements of the new rules. The new CDD rules focus on customer identification for persons who are covered by the newly coined definition of " beneficial owner. " A beneficial owner, under the expanded coverage, is defined as an owner of 25 percent or more of the legal entity independentbanker.org ICBA IndependentBanker 73 PHOTO: MAGICTORCH/GETTY IMAGEShttp://www.qmags.com/clickthrough.asp?url=www.independentbanker.org&id=20242&adid=P73E1