In a letter today to federal regulators, House Financial Services Committee Chairman Patrick McHenry (R-N.C.) and Rep. Blaine Luetkemeyer (R-Mo.) expressed “serious concerns” about a Financial Crimes Enforcement Network rulemaking regarding access to the registry of beneficial ownership information, saying the proposal deviates from congressional intent.
FinCEN established the registry last year pursuant to the Corporate Transparency Act, part of the Anti-Money Laundering Act of 2020. In their letter, the two lawmakers said the agency’s proposal runs counter to what Congress mandated in 2021 when it passed defense spending legislation that included language to strengthen the government’s anti-money laundering enforcement capabilities. They also said the agency needs to establish a secure process through which financial institutions can fully access the database to confirm customer information on demand, and set up a process through which updates to the database are shared with those institutions.
“It is important to restate this new process was never designed to undermine the requirement that financial institutions identify and verify the beneficial owners of their legal entity customers,” the lawmakers wrote. “It was not designed to be used by financial institutions only at account opening. And it was not intended to impose duplicative requirements on financial institutions. To the contrary, the process established in [the defense bill]was intended to fully facilitate a financial institution’s responsibility under the [customer due diligence]regulation by requiring covered companies to directly provide their information to the Department of the Treasury.”