Fargo VA Federal Credit Union
Member Due Diligence Policy
I. Purpose
The purpose of this policy is to implement and follow procedures to enable this Credit Union to monitor account activity to identify suspicious activity that may be a result of money laundering, criminal activity, tax evasion or terrorist financing.
II. Procedures
In addition to the identifying information required by the USA Patriot Act, Member Identification Program, the following information shall be obtained at account opening from each new member:
1. Type of Identification to include identification number, issue date and expiration date
2. Occupation
3. Reason for choosing the Fargo VA Federal Credit Union for a financial institution
4. Type of Account to open
5. Source of funds to open account
6. Purpose of the account
7. Estimated monthly account balance
8. Type of Services to include anticipated monthly dollar volume and anticipated number of transactions.
III. Risk Assessment
Based on the additional information received from the new member, a risk rating will be assigned to the account. The definitions will be as follows:
A – Extremely low
B – Low
C – Moderate
D – High
E – Extremely high
For accounts having a low occurrence and or low anticipated dollar volume of cash deposits, cash withdrawals, and or wire transfers, we will assign them a low or extremely low risk rating
For accounts having a higher occurrence and or higher anticipated dollar volume of cash deposits, cash withdrawals, and or wire transfers, we will assign them a moderate, high or extremely high risk rating.
We will also look at the source of funds, purpose of the account, and type of account to determine the account’s risk rating.
For accounts having a risk rating of A, B or C the Credit Union will monitor accounts through our regular suspicious activity monitoring and due diligence processes. Our regular monitoring includes but is not limited to monitoring the overdrawn account list, wire transfer files, fraud alerts from FIS, ACH reports, regulation D report and internet transfer receipts.
Member Due Diligence Policy
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For accounts having a rating of D or E, the Credit Union will monitor the accounts through our regular suspicious activity monitoring and due diligence processes but will also monitor
the accounts on a daily basis to watch for any suspicious activity in the account. If necessary, the compliance officer will have conversations with the member, obtain third party references, or research public information.
If there is a SAR filed or other indication of suspicious activity on the account, the compliance officer should reassess the risk score and revise it to appropriate level after monitoring the account and fulfilling the due diligence processes.
If there is an indication of a potential change in the member’s risk profile such as change of employment or unexpected account activity, the compliance officer should be notified and
Reassess the member’s risk rating.
Approved by the Board of Directors: May 27, 2010
Reviewed:
Revised: 8/11