CDD
The FinCEN rule requiring financial institutions to identify and verify the identity of beneficial owners of legal-entity customers.
The Customer Due Diligence (CDD) rule, finalized by FinCEN in 2016 and effective May 2018, requires covered financial institutions to identify and verify each beneficial owner (25%+ ownership or substantial control) of a legal-entity customer at account opening. CDD is the operational engine of KYB at U.S. banks. It is distinct from, but overlaps with, the FinCEN Beneficial Ownership Information (BOI) report — CDD is at the bank, BOI is at FinCEN.
Also known asCustomer Due Diligence, CDD Rule
Related terms
- KYB — The verification process U.S. financial institutions perform on a legal entity (LLC, corporation, partnership)…
- BOI Report — The FinCEN report under the Corporate Transparency Act that discloses each beneficial owner of a U.S. LLC or c…
- FinCEN — The U.S. Treasury bureau that administers the Bank Secrecy Act and collects the Beneficial Ownership Informati…
- Patriot Act Section 326 — The 2001 USA PATRIOT Act provision requiring financial institutions to implement a Customer Identification Pro…