The American Bankers Association joined a group of financial trade associations in a letter to Senate Banking Committee leaders endorsing the Illicit Cash Act, a bipartisan bill introduced today that would create a secure beneficial ownership registry of legal entities, to be overseen by the Financial Crimes Enforcement Network and the Treasury Department. Creating such a data base would help close a “massive loophole” in the existing anti-money laundering framework, the groups said.
“We believe the bill strikes the right balance between imposing minimal requirements while providing critical information to law enforcement and financial institutions performing due diligence,” the groups noted. “We believe this legislation will provide clarity and consistency in implementation to helps streamline due diligence processes while providing law enforcement with the key information needed to pursue unlawful financial activities.
ABA—which has long advocated for the creation of a beneficial ownership registry—also sent its own letter of support to Senate lawmakers. “While financial institutions go to great lengths to know their customers and follow all requirements to know the beneficial owners, there is no formal system in place to identify beneficial owners and ensure that shell companies are not hiding money or other illegal activities,” the association said. “While this process may be transformative for the United States, it would simply bring the U.S. in line with other developed countries.”