As the banking industry prepares to implement the Financial Crimes Enforcement Network’s final beneficial ownership rule, FinCEN Acting Director Jamal El-Hindi today said that the agency is considering additional guidance to help address lingering questions from financial institutions ahead of the May 2018 compliance deadline. The rule requires banks to collect information on beneficial owners — individuals who own more than 25 percent of the equity interests in a company, or a single individual who exercises control — when an account is opened.
Addressing the rule’s 25 percent reporting threshold at the ABA/ABA Financial Crimes Enforcement Conference, El-Hindi noted that regulators included language in the rule that gives banks flexibility to collect additional information on customers below the 25 percent equity interest threshold in order to “support industry’s own efforts” when they feel they need to collect information at a lower threshold. Andrea Sharrin, director of FinCEN’s policy division, added that the agency is finalizing a new set of frequently asked questions, and regulators noted that they are working to update the FFIEC manual to incorporate new information on beneficial ownership.
When it comes to enforcing the beneficial ownership rule, the OCC’s Donna Murphy noted that regulators “have been planning to begin looking at compliance through the risk-based examination process once the date comes into effect. If there are deficiencies, we will be addressing them.” She added, however, that “that doesn’t mean one should expect to see a plethora of enforcement actions.”
Discussing enforcement more broadly, regulators noted that the anti-money laundering violations today are much more nuanced than in previous years. “Nowadays, we’re seeing a much, much higher level of compliance,” said Sarah Green, senior director for enforcement and AML policy at FINRA. “Violations are generally more focused on specialized instances.”