Know Your Customer Screening for Negative News

August 16th, 2018

Customer Due Diligence hatched in the 1990’s as “Know Your Customer” initiatives from the Federal Reserve, OCC and FDIC.  During that time, Congress easily defeated what was seen by many as intrusions into the American public’s privacy.

That changed on September 11, 2001.

In the months following the attacks on the United States, Congress overwhelmingly approved the USA PATRIOT Act, provisions of which enshrined into law financial institution obligations to know their customers.

The past 15 years have seen regulation of financial institutions grow substantially. The instability of our country’s banking system brought on by loose credit, poor mortgage underwriting, and the recession in 2008, added more regulation.  At no point in our history have financial institutions, of all kinds, been subjected to more regulation and oversight than right now. This isn’t going to change.

There are thousands of rules and regulations to which financial institutions must adhere.  Some are more important than others.  Among these more important requirements are those that are collectively known as “Know Your Customer” mandates which have several elements including Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD).