Beneficial Ownership

Regulatory Change: Beneficial Ownership Certification Information Requirements

The U.S. government has amended customer due diligence rules to require financial institutions, like Nodaway Valley Bank (NVB), to collect and verify specific information from legal entities (businesses) establishing relationships with NVB. The new rules are frequently referred to as beneficial ownership or beneficial ownership certification.

Why did this change occur?

The new rules help fight financial crime. Because legal entities can be abused to disguise involvement in money laundering, terrorist financing, tax evasion, corruption, fraud, and other financial crimes, requiring the disclosure of key individuals who ultimately own and/or control a legal entity helps law enforcement investigate and prosecute these crimes.

Banking relationships and the new rule

The beneficial ownership rules apply to all formal banking relationships established to provide or engage in services, dealings, or other financial transactions, including a deposit account, a transaction or asset account, a credit account, or other extension of credit. An account also includes a relationship established to provide a safety deposit box or other safekeeping services, or cash management, custodian, and trust services.

Required Documents

For businesses who would like to open a new NVB account, we are required to collect certain information about the owners/controllers of the company. To help you prepare for opening your account at NVB, we have created account onboarding checklists.

These checklists are linked below and separated by legal entity type.

Corporations LLC

Partnerships Organizations

Sole Proprietorship Business Trusts

Exceptions to the new rule

Legal entities not impacted by the beneficial ownership requirement include sole proprietorships, unincorporated associations, or natural persons opening accounts on their own behalf.

If you have questions about the beneficial ownership certification requirements, please feel free to contact your NVB relationship banker or lender.

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