Effective May 11, 2018, new Federal rules require all banks to obtain, verify, and record information about the ownership of legal entity customers when opening a new account.

This page will help you understand the new requirements.

 

1. What information is being requested?

As part of the application form, you will be asked to identify up to four beneficial owners of this business, plus one person with significant managing control.

For each U.S. person, the required information includes:

  • Name
  • Residential Address (no P.O. boxes)
  • Date of Birth
  • Social Security Number

You are considered a U.S. person if you are an individual who is a U.S. citizen or U.S. resident alien.

For Canadian and other foreign persons, the required information includes:

  • Name
  • Residential Address (no P.O. Boxes)
  • Date of Birth
  • Passport Number and country of issuance. (In lieu of a passport, foreign persons may also provide a U.S. government-issued Alien ID or other foreign government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard.)

2. Who is responsible for providing this information?

This information must be provided by the person opening a new account on behalf of a legal entity.

3. What is a legal entity?

For the purposes of this form, a legal entity includes:

  • Corporations
  • Limited liability companies (or other entities created by a filing of a public document with a Secretary of State or similar office)
  • General partnerships
  • Similar business entities formed in the United States or a foreign country

4. What business types are exempt from this requirement?

The following legal entities are exempt:

  • Non-Statutory Trust
  • Bank/Bank Holding Co/Credit Union
  • Federal/State/Local Government Agency or Authority
  • Public Company and Majority Owned Affiliate
  • Investment Company/Adviser
  • Public Accounting Firm
  • Insurance Company

NOTE: The following are not legal entities, and not required to provide this information: Natural Person, Sole Proprietorship, and Unincorporated Association.

5. Are non-profits exempt?

Non-profits have a partial exemption, and must only identify a person with control.

6. What is a beneficial owner?

An individual, who owns, directly or indirectly, 25 percent or more of the equity interests of the legal entity customer.

7. What is a person with control?

An individual with significant responsibility for managing the legal entity customer. For example, an executive officer, senior manager, or any other person who regularly performs similar functions.

8. Can my application be approved without this information?

No. WEX Bank cannot review or approve an application until the beneficial owner information has been received and verified.

9. What if I don’t have all of this information when filling out the application?

If you need more time to gather the required information, you have the option to save your progress. You will receive a secure link that will allow you to return to the online form, complete the missing information, and submit your application. This link will be active for 30 days, after which you will need to start a new application form.

10. What if a beneficial owner is also a person with control?

If an individual is both a beneficial owner and person with control for a legal entity, their information will need to be identified under both types.

11. Do existing accounts have to provide this information?

This information is not required for any WEX Bank account opened before May 11, 2018. However, if the same legal entity opens a new account after that date, its beneficial owner information must be provided. Also, changes in ownership structure after that date may require updated beneficial owner information.

12. What are some examples of beneficial ownership?

Example 1: Mr. and Mrs. Smith each hold a 50% equity interest in Mom & Pop, LLC. Mrs. Smith is President and Mr. Smith is Vice President.

Mom & Pop, LLC would be required to identify at least two, but up to three individuals:

  • Both Mr. and Mrs. Smith as beneficial owners
  • Either Mr. or Mrs. Smith as a person with control, or a third person with significant responsibility

Example 2: Acme, Inc. is a closely-held private corporation. John Doe holds a 35% equity stake, and no other person holds a 25% or higher stake. Jane Jones is the President and Chief Executive Officer.

Acme, Inc. would be required to identify two individuals:

  • John Doe as a beneficial owner
  • Jane Jones (or another person with significant responsibility) as a person with control

Example 3: Quentin, Inc. is owned by the five Quentin siblings, each of whom holds a 20% equity stake. Quentin Inc.’s President is Benton Quentin, who is the only individual with significant management responsibility.

Quentin, Inc. would be required to identify one individual:

  • Benton Quentin as the person with control
  • No individuals as beneficial owners, because no sibling has a 25% or higher equity stake

13. Where can I review the official Federal rules?

These requirements were issued under the Bank Secrecy Act by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury. Read the final rules here.