About the 2018.1 Updates

This package contains materials required to update your Wolters Kluwer Deposit Account Manual (Laws & Regulations Affecting Deposit Accounts).Wolters Kluwer is committed to keeping you informed on all of the latest regulatory changes. Wolters Kluwer will continue to distribute one update each year, usually in November or December.

Product Download Site

As requested by customers, the Deposit Account Manual will no longer be available from CD, but instead will be utilizing the Product Download Site to deliver the Deposit Account Manual beginning with the 2018.1 release, scheduled for October 2018.

General Review

This year, we have revised the Manual to address significant regulatory developments. First, a compliance change to the Customer Due Diligence (CDD) Beneficial Ownership (BO) Rule in The Bank Secrecy Act And Related Requirements section in the Ongoing Responsibilities subsection. Also, the Elder Financial Exploitation has been added to The Federal Privacy Laws section in the Ongoing Responsibilities subsection. Authorized Multiple-Party Accounts and The Check-Return Requirements And Indorsement Standards of Regulation CC have also been updated. These changes are described in greater detail below.

Customer Due Diligence (CDD) Beneficial Ownership (BO) Rule

Effective May 11, 2018, all covered financial institutions must identify and verify the identity of the beneficial owners of all legal entity customers (a term defined in the CDD BO Rule) at the time a new account is opened. This new rule and its requirements were issued by FinCEN to clarify and strengthen CDD requirements under the Bank Secrecy Act. We discuss the rule’s identification and verification requirements, definitions, and supplemental FinCEN guidance in The Bank Secrecy Act And Related Requirements section in the Ongoing Responsibilities section.

Elder Financial Exploitation

Reports of elder financial exploitation (EFE) at both the federal level and state levels have increased substantially over the years and show no signs of slowing down, and on both levels financial institutions have been recognized as those who can play a key role in detecting and preventing EFE. FinCEN, the CFPB and other federal agencies have clarified that Federal law generally permits financial institutions to report suspected EFE to – or respond to requests for personal identification from – law enforcement, Adult Protective Services (APS) and other relevant entities. At this time many states require financial institutions to report suspected EFE to APS, law enforcement or both; many states require “any person” with knowledge or suspicion of EFE to make official reports; and several states require financial institutions to conduct EFE training for their employees and to establish written policies for reporting EFE. Effective May 24, 2018, under the Economic Growth, Regulatory Relief, and Consumer Protection Act (SF 2155, Public Law No. 115-174), covered financial institutions and their employees who receive specialized training are immune from civil and administrative liability for good faith reporting of suspected exploitation of senior citizens. We further discuss this topic and additional resources in The Federal Privacy Laws section in the Ongoing Responsibilities section.

Authorized Multiple-Party Accounts

Several states have abolished state-chartered thrifts, revised their statutes (e.g., authorizing POD accounts instead of revocable trusts), or have renumbered or otherwise amended the cited statutes. We have made those changes to the corresponding states and provided the new or updated citations.

The Check-Return Requirements And Indorsement Standards of Regulation CC

In addition to businesses’ traditional use of scanners for Remote Deposit Capture (RDC), many consumers are using their smart phones to take a picture of the front and back of a check and then, via a mobile banking app, send it to their banks for deposit. We are calling this last type “Mobile Remote Deposit Capture” (mRDC). Under both of these forms of RDC, the depository institution accepts the deposit and uses the information to create an electronic check or a substitute check for collection. If the original check is also deposited (duplicate presentment) there could be substantial losses. Therefore, the amendments to Regulation CC, effective July 1, 2018, added a new indemnity for these situations and an important exception to this indemnification. We have supplemented the information about the amendments to Regulation CC to include this information.