Credit Union requesting Business Accounts

IsThisOneFree

A friend has been running his own business for 20 odd years as a sole trader. He recently (within the past 12 months) moved his business account from Ulster Bank to the local Credit Union as UB have closed our local branch.

He went into the CU during the week and said they told him that they need a copy of his business accounts. He doesn't have (and is not applying for) a loan with the CU and asked why they needed this - they said that it was "new regulations/legislation".

I know that every CU is a separate entity and can make their own rules, but has anybody ever heard of this before ? I (nor he) can see any reason why they should need to know anything about his business income and outgoings. I have a personal a/c with the CU they've never asked for any of my payslips.

Any thoughts on this ?

godtabh

IsThisOneFree wrote: »

A friend has been running his own business for 20 odd years as a sole trader. He recently (within the past 12 months) moved his business account from Ulster Bank to the local Credit Union as UB have closed our local branch.

He went into the CU during the week and said they told him that they need a copy of his business accounts. He doesn't have (and is not applying for) a loan with the CU and asked why they needed this - they said that it was "new regulations/legislation".

I know that every CU is a separate entity and can make their own rules, but has anybody ever heard of this before ? I (nor he) can see any reason why they should need to know anything about his business income and outgoings. I have a personal a/c with the CU they've never asked for any of my payslips.

Any thoughts on this ?

Their rules. If you dont like them go elsewhere?

IsThisOneFree

godtabh wrote: »

Their rules. If you dont like them go elsewhere?

Every business (especially regulated ones) have a responsibility to only request and hold data that they *need*. The more data a business holds, the more data that can be compromised in the event of a breach. As I said in my original post, I'm curious if anybody has ever encountered this before and/or received any rational explanation why they were necessary.

All banks are currently chasing their tails to get ID and proof of address for all signatories and proof of the ultimate beneficial owner of each company and bank account to comply with the fifth anti money laundering directive.

If it is a business account they might be trying to see who the ultimate owner is.

Cynics also suggest this is a big reason why the UK is leaving the EU - the wealthy have been hiding their wealth in trusts and the like and this would require them to identify it all.

Darc19

1. If you are a business and want to open a bank account with another bank, that bank will normally require copies of accounts.

2. Assuming it's a registered company, their abridged accounts are available for everyone to see on the cro website.

So what are they hiding?

They are a sole trader so no public accounts would be available.

Even then published accounts might not have enough detail about ownership to satisfy them.

godtabh

IsThisOneFree wrote: »

Every business (especially regulated ones) have a responsibility to only request and hold data that they *need*. The more data a business holds, the more data that can be compromised in the event of a breach. As I said in my original post, I'm curious if anybody has ever encountered this before and/or received any rational explanation why they were necessary.

Agin chose a different one that doesn't request the information. Assuming an adult is involved surely thats the most logical step?

The CU has told you why it needs the information. Accept it or move on. Dont manufacture a reason to be offended.

IsThisOneFree

All banks are currently chasing their tails to get ID and proof of address for all signatories and proof of the ultimate beneficial owner of each company and bank account to comply with the fifth anti money laundering directive

Thanks, sounds like that's probably the answer he's looking for. He said that he already provided passport and proof of address, but maybe proof of ownership is what they're *really* looking for.

The CU has told you why it needs the information. Accept it or move on. Dont manufacture a reason to be offended.

It's nothing to do with being offended. It's about not providing companies with everything they ask for just because they want to. *every* company is gradually asking for more and more of your personal information, and if nobody questions it, then they'll just continue to do so unchecked. There's nothing unreasonable in questioning (or even being suspicious of) their motives for requesting specific information beyond what seems reasonable and normal

RiseToMe

It's all anti money laundering. They need to see the money is coming from legitimate customers and be able to prove that they have done their due dilagance if asked to by regulators.

Jim2007

IsThisOneFree wrote: »

I (nor he) can see any reason why they should need to know anything about his business income and outgoings.

It is a basic requirement to meet money laundering requirements. They are fully entitled to required supporting documentation for receipts in particular.