FinCEN’s Blanco Touts Need for Legislative Solution on Beneficial Ownership

The lack of beneficial ownership information collected when companies are formed is “a dangerous and widening gap in our national security apparatus,” Financial Crimes Enforcement Network Director Kenneth Blanco said today at the ABA/ABA Financial Crimes Enforcement Conference. While the 2018 customer due diligence rule requiring financial institutions to collect this information from customers was a good first step, Blanco said that “the next critical step to closing this national security gap is to collect beneficial ownership information at the corporate formation stage.”

Blanco added that FinCEN is “committed to working with key stakeholders, including Congress, to find an effective solution to this.” One American Bankers Association-advocated legislative approach—H.R. 2513, which is sponsored by Rep. Carolyn Maloney (D-N.Y.) and passed the House this fall with a bipartisan majority—would address this by requiring corporations to file a report on their beneficial owners with FinCEN, which would in turn create a national database that banks could use to verify a business’s beneficial ownership information.