New Regulations Governing Account Opening Requirements for Legal Entities
Effective May 11, 2018, all Financial Institutions are required to identify the ultimate beneficial owner(s) and controlling person of a Legal Entity opening or maintaining an account. Requiring the disclosure of beneficial owners (key individuals who own or control a Legal Entity) will help the government fight financial crime. Each time an account is opened or maintained for a covered Legal Entity, all Financial Institutions are required to collect identifying information for each individual that has beneficial ownership (25% or more) and, an individual that has significant managerial control of the Legal Entity.
In support of these regulatory efforts, Texas Community Bank implemented these information gathering requirements on May 11, 2018. This means that any time an account is opened or maintained for a Legal Entity, we will request information which identifies the ultimate beneficial owner(s) and controlling person of the Legal Entity. The required identifying information includes name, address, date of birth, identification number (social security number, or passport number and country of issuance or similar ID number), and other information that will help identify those individuals. This information will need to be collected whether or not the person identified is a bank customer. This information will also be collected for existing Legal Entity clients who establish additional accounts on or after May 11, 2018.
If you have questions about these new account opening requirements for Legal Entities, please contact your Texas Community Bank Branch or Relationship Manager at (956) 722-8333.
Frequently Asked Questions
What constitutes beneficial ownership?
A beneficial owner is an individual who owns or controls the entity doing business with Texas Community Bank. Federal regulation requires Financial Institutions to obtain, verify and record information about the beneficial owner.
The following individuals are considered beneficial owners:
- Each individual, if any, who owns, directly or indirectly, 25% or more of the equity interests of a Legal Entity (e.g. each natural person who owns 25% or more of the shares of the corporation), and
- An individual with significant responsibility for controlling or managing the Legal Entity (e.g., Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President or Treasurer).
What types of Legal Entities are covered by this regulation?
Legal Entity includes corporations, limited liability companies or other entities created by filing a public document with the Secretary of State, and partnerships. Legal Entity does not include sole proprietorships, unincorporated associations, trusts (with some exceptions), publicly traded companies, and most Financial Institutions, among others.
What information will I need to open an account?
When opening business accounts, in addition to collecting the usual business information (business name, business address, type of business, business registration number), Texas Community Bank will collect information regarding the identity of all individuals who have a significant ownership or control position.
The information that is required includes:
- Name and title.
- Residential address.
- Date of birth.
- Identification number (social security number, or passport number and country of issuance or similar ID number).
- Percentage of ownership.
Additionally, at the time a new account is opened for a Legal Entity, Financial Institutions are required to obtain a certification from the individual opening the account on behalf of the Legal Entity, certifying that the information provided on the beneficial owner and/or controlling manager is accurate.
Must Texas Community Bank verify the percentage (%) of ownership on Legal Entities?
The Bank can rely on the Certification of Beneficial Owner(s) completed by the person opening the account on behalf of the Legal Entity customer, unless it has actual knowledge that any of the information is incorrect.
Must Texas Community Bank verify the accuracy of the information collected on each individual?
Yes, Texas Community Bank is required to verify identifying information for all beneficial owners. We verify that information by obtaining ID, unless the individual is an existing customer and Texas Community Bank already has ID on file.
Must Legal Entities notify Texas Community Bank of changes in beneficial ownership?
This information is required only at the time of a new account opening, however the Bank may require updated information on existing accounts in certain instances.
What if the identified beneficial owners or control persons are not Texas Community Bank customers? Do they still need to provide their personal information?
Yes. Regardless of client status, information about the ultimate beneficial owners and control person must be provided in order to comply with the regulation.
I have an existing business account. Will I need to provide additional ownership information?
The change should not impact your existing accounts. However, this information will be collected for existing Legal Entity customers who establish additional accounts beginning May 11, 2018.
Does the new regulation requirement apply to loan accounts?
Yes, this requirement applies to all accounts, including checking, savings, certificates, loans, and safe deposit boxes.
Who can assist customers with questions?
Customers should contact the respective Texas Community Bank Branch or Relationship Manager at (956) 722-8333.