Can a credit union require a lower ownership threshold for beneficial ownership criteria?

The correct answer is that a credit union can indeed require a lower ownership threshold for beneficial ownership criteria, particularly for higher-risk entities. The Financial Crimes Enforcement Network (FinCEN) guidelines allow financial institutions, including credit unions, to apply additional scrutiny depending on the risk profile of the customer. Lowering the threshold below the standard 25% may be warranted in situations where the credit union perceives an increased risk of money laundering or other illicit activities.

By requiring a lower threshold, a credit union can enhance its ability to detect and mitigate potential risks associated with business relationships that might be linked to criminal activities. This approach aligns with the broader BSA/AML (Bank Secrecy Act/Anti-Money Laundering) compliance framework, promoting a more proactive stance in identifying and monitoring beneficial ownership structures that could mask illicit intentions.

The other options focus on fixed or restrictive interpretations of the rules, which do not reflect the flexibility granted to financial institutions based on risk assessments in the BSA/AML context. Thus, the option that supports a proactive and risk-based approach is the most aligned with compliance best practices.