What is the beneficial ownership regulation and why
does it matter?
The U.S. Department of
Treasury recently issued a final rule titled “Customer Due Diligence Requirements for
Financial Institutions” (31 CFR 1010.230) that creates new due diligence obligations for
credit unions and other financial institutions. All financial institutions are now required
to collect and verify the identities of certain individuals who own or control legal entity
customers, including corporations, limited liability companies (“LLCs”), partnerships, and
other legal entities. Individuals who own or control legal entity customers are considered
“beneficial owners” of that entity. The regulation is aimed at making financial institutions
safer for their customers and protecting the country’s financial system.
What is required?
The regulation requires Magnifi Financial to gather the
following information from beneficial owners of its new and existing legal entity
- Date of birth,
- Current physical residential address or business address,
- Social Security Number (or other government issued
identification number for non-U.S. citizens without a SSN).
Most U.S. publicly traded entities, regulated entities, and
government entities will be excluded from these requirements.
How will the new requirement impact
A Magnifi Financial representative
may ask to review the following documentation:
- A document verifying your identity and date of birth, such
as a driver’s license or passport. A copy of the identification document may also be
- A document verifying your current address, if not listed
on the document.
While we understand the information requested is personal and
sensitive, we need to obtain this information in order to comply with the law. As always, we
will treat all information collected with the utmost care. We appreciate your business and
are committed to providing you with extraordinary service for years to come.