What is the primary purpose of Customer Due Diligence (CDD) in BSA compliance?

The primary purpose of Customer Due Diligence (CDD) in Bank Secrecy Act (BSA) compliance is to understand the customer's activities and the associated risks. CDD involves gathering and analyzing information regarding a customer's identity, nature of their business, and overall transactional behavior. This understanding is crucial for identifying potential indicators of money laundering or other financial crimes, allowing financial institutions to assess risks and develop appropriate strategies for monitoring and reporting suspicious activities.

By evaluating the customer's profile and behavior, institutions can tailor their compliance measures, ensuring they remain vigilant against unlawful activities. This process is essential not only for regulatory compliance but also for protecting the institution’s reputation and financial integrity.

In contrast, the other options do not encapsulate the primary goal of CDD. While documenting transactions is important, it is more of a procedural necessity rather than the core purpose of CDD. Promoting customer trust and satisfaction is beneficial from a business perspective but is not directly related to BSA compliance. Additionally, minimizing charges for account maintenance relates to operational cost management rather than the risk assessment and understanding that CDD aims to achieve.