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U.S. bank examiners may refrain from vigorously enforcing new corporate-transparency requirements as soon as they take effect, say regulators.

Under the U.S. Treasury Department’s customer due-diligence rule, or CDD rule, financial institutions beginning in May must take reasonable steps to identify any individual who owns at least 25 percent of any corporate entity for whom they maintain accounts, and a person who exercises significant control over the firm in question.

Regulators will assess whether banks are in compliance with the new rule “beginning with implementation day” and during the “regular course” of their examinations, but probably will not penalize those initially found in violation, Donna Murphy, a senior official with the U.S. Office of the Comptroller of the Currency said.

“We don’t have a concerted effort to send examiners into every bank on May 12,” Murphy said during a regulatory panel at an American Bankers Association conference in Maryland. “If there are deficiencies we will be addressing them, but that doesn’t mean one should expect to see a huge plethora of enforcement actions.”

During those examinations, a financial institution’s effort and “intent” to implement the new rule will be weighed against the potential impact of any shortcomings its program to comply with it may carry, Debra Novak, head of anti-money laundering compliance at the Federal Deposit Insurance Corp., or FDIC, said.

“There could be recommendations that are made to improve [the program] that may not result in a violation,” Novak said at the conference.

The Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, first pitched the CDD rule in 2012 and issued a final version four years later, giving the financial services industry at least two years to gear their compliance programs toward identifying significant corporate owners and directors.

But questions over certain aspects of the rule persist, including whether or not anti-money laundering compliance departments can in all cases stop at the 25-percent threshold when collecting beneficial-ownership information, or must drill lower for higher-risk clients.

The final rule describes the 25-percent level as a “floor, not a ceiling” and advises that covered entities “may do more in circumstances of heightened risk.”

FinCEN’s policy director, Andrea Sharrin, echoed the final rule during the regulatory panel, advising that financial institutions can strictly adhere to the 25-percent threshold but may choose to impose stricter disclosure demands on certain clients.

“As far as when you have to or should go below [25 percent], that’s going to be based on a particular customer and whether that really gets to the risk that you are trying to address … and it may not,” Sharrin said.

A deluge of negative news concerning a legal-entity account holder and its owners may warrant a lower beneficial-ownership threshold, for example.

“If with 25 percent across the board you don’t get to an individual, you may want to look a little deeper,” Koko Ives, manager of AML and Bank Secrecy Act compliance with the Federal Reserve said during the regulatory panel.

FinCEN and other federal banking agencies are updating the BSA exam manual’s CDD section and drafting new provisions pertaining to beneficial ownership. The bureau is also developing a second tranche of guidance to complement the frequently-asked-questions document issued last year.

Whatever form the final exam manual and additional guidance take, the CDD rule is bound to have a sizeable, long-term impact on the compliance industry beyond the immediate burden of implementation, Jim Richards, head of Bank Secrecy Act compliance at Wells Fargo said at the conference.

“Where the regulatory drift is going to occur … is on what you do with that information,” Richards said. “Because if you have to have an enterprise view of your customer and your customer now includes beneficial owners, what’s that going to do to your risk rating, what’s that going to do to your SARs … your CTRs, your sanctions screening, your hot list, your PEPs [politically exposed persons]?”

Financial institutions in the meantime have taken their own, unique approaches to solving the quandry.

“We are 25 percent generally, 10 percent for high-risk [customers],” Christopher Simpkins, BSA officer for Arvest Bank, a regional lender in Arkansas said during a later panel at the conference. “I’ve heard a few banks are even going to 1 percent for high-risk customers.”

Arvest Bank, according to Simpkins, began collecting ownership data from high-risk clients last year and has already observed apparent attempts to evade the rule, including at least one case in which the declared owners of a legal-entity client “quickly” jumped from four individuals with a 25-percent stake to five individuals with only 20 percent.

“I think it would be deficient of us to say ‘that’s okay, we don’t need to [do more]’ … because clearly the implication there was that they were trying to avoid the collection of information,” Simpkins said.