The Richwood Blog

Why does my bank ask for my information?

When you open an account at Richwood Bank, we want to get to know you, how you bank, and what’s important to you. We do this so we can understand your banking needs and recommend the best financial products. When we know you, we will be able to give you trusted advice and offer you the banking services that best suit your needs.

However, some of the questions we ask are for other reasons, like asking for certain identifiable information. Banks are subject to many laws, including ones that help prevent, for example, terrorism funding, money laundering and white-collar crime. Richwood Bank is committed to being socially responsible and keeping your accounts safe. We ask you for your information to help the government prevent these crimes. To be specific, it’s Section 326 of the USA Patriot Act that requires us to obtain, verify and record information that identifies each person who opens an account.

What does this mean to you?

When you open an account or change an existing account, we will ask for your:

  • Legal name,
  • Physical address and mailing address (if different),
  • Taxpayer identification number,
  • Date of birth, and,
  • Other information that will allow us to identify you, such as a driver’s license.

What about Businesses?

Business entities are required to provide their:

  • Legal name,
  • Physical address and mailing address (if different),
  • Taxpayer identification number,
  • Other information that will allow us to identify the entity, such as articles of incorporation.
  • All signers on that account will also be required to provide the identification information as well.

New Rules for Legal Entities

Effective, May 11, 2018, all banks will be subject to new rules under the Bank Secrecy Act that will aid the government in the fight against crimes to evade financial measures designed to combat terrorism and other national security threats. This means that Richwood Bank will collect beneficial ownership information from legal entity customers. Any time an account is opened or renewed for a legal entity, we will request information that identifies the ultimate beneficial owner(s) and controlling person of the legal entity.  The required identifying information includes, name, date of birth, physical address, taxpayer identification number, and other information that will allow us to identify the beneficial owner. While we understand the information requested is personal and sensitive, we obtain this information in order to comply with the law.  All information is stored securely and handled with the same standard of privacy that we have always maintained.

Who is a Legal Entity Customer?

Examples of legal entity customers include corporations, partnerships, or other similar business entities that open an account or maintain an account at Richwood Bank.

Who is a Beneficial Owner?

The USA Patriot Act defines ‘beneficial owner’ as being made up of two roles:

  • Ownership Role – Each individual who owns 25% or more of the company; and,
  • Control Role – One individual who has significant managerial responsibility for the company (e.g. CEO, CFO, Managing Member, General Partner, etc.).

In cases where an individual is both a 25% owner and meets the definition for control, the same individual could be identified as a beneficial owner under both roles. Nonprofit entities, whether or not tax exempt, are excluded from the Ownership Role. Richwood Bank is required to collect information for one individual that has a Control Role within the nonprofit.

What is Certification of Beneficial Ownership?

The Certification of Beneficial Ownership is a legally required form that Richwood Bank must collect from legal entity customers regarding their Beneficial Owners. When you complete the form, you are attesting that the information provided is accurate to the best of your knowledge.

To make your account opening experience as efficient as possible, we suggest obtaining the above information, along with a copy of your current Driver’s License and social security number, for each identified individual. If your business will frequently be opening new accounts or loans, keeping this information current and available to present each time you come in to establish a new account will help make your account opening experience seamless.

You can download the Beneficial Ownership Certification Form.

By Jamie Kibler, Chief Compliance Officer

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Posted by Cody Johnston on April 23, 2018 in Banking Basics and tagged , , , , , ,