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New FinCEN Requirements: How Obtaining a Financial Account Will Change

New FinCEN Requirements: How Obtaining a Financial Account Will Change
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Any time you obtain a financial product, be it a bank account or a loan, you have to provide some personal information. This process protects the lender from fraud and ensures that the relationship is transparent.

With the goal of preventing money laundering, the United States Treasury Financial Crimes Enforcement Network updated its customer due diligence requirements for financial institutions. This change affects businesses that seek financial accounts of any kind — including merchant accounts.

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New FinCEN Requirements for Spring 2018

Starting on May 11, 2018, the new FinCEN regulations go into effect requiring any and all new financial account applications to include additional information about the people who own and operate the business. Businesses in need of a financial account will now have to provide a Social Security number, date of birth and contact information for people who meet the following criteria:

  • Officer: A single individual defined as possessing "significant responsibility to control, manage, or direct a legal entity customer, including an executive officer or senior manager or any other individual who regularly performs similar functions."
  • Ownership: Anyone with at least 25 percent ownership.

An officer will now always be required. If no one owns at least 25 percent of the business, the ownership fields on applications for financial accounts can be left blank, with one person filling out the officer section. Likewise, a single-person sole proprietorship will require the one owner to fill out both the officer and ownership fields.

While privacy and information security are important considerations, these federal regulations require that banks, payment providers, credit unions and other lenders obtain this information from any business seeking a financial account.

Protecting Your Personal Information

As stated above, it’s understandable and wise to be wary of providing personal information such as a Social Security number or date of birth. However, these mandates are being passed down from the federal level.

Given these requirements, do your due diligence to only enter agreements with secure partners. Seek payment providers that have PCI Level 1 certification to ensure that you’re providing your information to a partner that meets the highest achievable security standard.

Learn more about PCI.


Are you already being asked to provide additional information for new financial accounts? What are your concerns during the application process? We’d be happy to explain these topics to you.

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Christina Lavingia

Christina Lavingia delights in crafting content that helps business owners fight fraud, reduce risk and process payments with ease.

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