Paycheck Protection Program – Don’t Forget About BSA and USA PATRIOT Act Requirements
Paycheck Protection Program – Don’t Forget About BSA and USA PATRIOT Act Requirements!
Beginning on April 3, 2020, small businesses and sole proprietors will be able to apply for loans under the Paycheck Protection Program (independent contractors and self-employed individuals can apply starting April 10th). If your institution is an existing SBA-certified lender and participates in this lending program, make sure you remember BSA and USA PATRIOT Act requirements still apply. FAQs released by the US Treasury for borrowers implies the only documentation applicants need for the application is payroll documentation; however, make sure your lenders and customer service personnel clarify to applicants that other documentation is required under your Bank’s BSA and/or USA PATRIOT Act policies, including organizational documentation and beneficial ownership certification. The application provided by the SBA requires the applicant to list owners with greater than 20% stakes, so not only will the applicant need to identify owners with this percentage, but under your final CDD rule requirements, they’ll also need to identify a control manager. You will also need to verify the identity of the owners and control manager and ensure you’ve collected full CIP on each. Last, but not least – don’t forget OFAC!
Be sure to review your existing policy requirements with lenders now and develop a plan for handling applications which may be submitted with missing or incomplete beneficial ownership information, CDD questionnaires, or CIP – the nature of this program puts funding in the borrowers’ hands quickly and missing information may be hard to obtain after the fact. In the rush to learn the program requirements for products designed to assist business borrowers in need during this economically challenging time, remember the existing requirements still stand when it comes to your BSA, OFAC, and USA PATRIOT Act compliance program.
For additional information contact the author at firstname.lastname@example.org.