IMPORTANT INFORMATION FOR NEW & EXISTING BUSINESS CLIENTS REGARDING NEW FEDERAL BENEFICIAL OWNERSHIP RULE
Effective May 11, 2018, new rules under the Bank Secrecy Act will aid the federal government in the fight against crime and terror. The new rules will apply to legal entity customers when establishing a new banking relationship with 1st Source Bank, including a new 1st Source deposit account or loan.
In order to facilitate law enforcement efforts to combat various illegal activities, including drug trafficking, organized crime and terrorism, certain laws have been passed and government initiatives established to inhibit or identify money laundering. Laws and directives requiring action by banks, credit unions and other financial institutions include the Bank Secrecy Act, The USA Patriot Act and directives issued by agencies of the U.S. Department of Treasury (specifically, the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC)). The Rule requires the disclosure of key individuals who own or control a legal entity (Beneficial Owners).
Yes, most likely, if your business is a legal entity (i.e., corporation, limited liability company, partnership, etc.). Your banking representative will advise you if you are exempt. Notably, the Rule does not apply to individuals and sole proprietorships.
The Rule applies to all qualifying accounts for legal entity customers, including, for example, checking, savings, CDs, loans and leases.
Beneficial Owners are defined in the Rule as individuals who meet the following “Ownership” or “Control” criteria:
Ownership: Each individual who owns, directly or indirectly, 25% or more of the equity interests of the legal entity.
Control: An individual with significant responsibility for managing the legal entity, such as an executive officer or senior manager (e.g. CEO, CFO, COO, managing member, General Partner, President, Vice-President or Treasurer) or any other individual who regularly performs similar functions. While many legal entities will have more than one individual with significant management responsibility, only one of those individuals is required to be disclosed under the Rule.
An authorized representative of the legal entity will be required to provide and certify the accuracy of the following information for each identified beneficial owner:
- Full legal name;
- Date of Birth;
- Residential or Business Street Address (cannot be a PO Box);
- Social Security Number or Passport Number and Country;
- Ownership Percentage (not required for control person); and
- Copy of driver's license, passport or other valid government-issued photo identification.
The above information regarding the beneficial owners plus additional information regarding the legal entity and the person opening the applicable account (or otherwise completing the form) will be collected in a Certification of Beneficial Owner(s) Form. The form will need to be executed by an authorized representative of the legal entity and can be submitted via hard copy in a banking center or via a secured electronic form.
Yes, anytime a legal entity expands its relationship with 1st Source Bank and at certain other times required by the Rule.