Missouri banker: Beneficial ownership registry must be fully accessible to banks

The Financial Crimes Enforcement Network’s implementation of the Anti-Money Laundering Act of 2020 must be done in line with congressional intent, Pete Selenke, VP and AML/BSA Officer for The Central Trust Bank in Jefferson City, Missouri, told House lawmakers today. Testifying on behalf of ABA at a hearing on FinCEN’s beneficial ownership rulemaking, Selenke raised the association’s concerns about the database of beneficial ownership registry that FinCEN is required to create pursuant to the Corporate Transparency Act, a key part of AMLA.

“Congress explicitly intended for the beneficial ownership information included in the registry to be accessed by banks, with their customers’ consent, for purposes of complying with the ‘customer due diligence’ requirements under applicable law,” Selenke said. “This directive is broad and clear. However, in the proposed rule FinCEN issued last December, the use restrictions FinCEN placed on this information make this beneficial ownership registry information useless to banks.”

In his oral testimony, Selenke said that “[t]he beneficial ownership registry must be a reliable and authoritative source of information, and the Federal government must make sure the information in the registry is accurate. This responsibility should not be imposed on those seeking to access to the database. If the accuracy of the registry’s information is in doubt, banks may not use the database at all.”

Selenke also urged the federal government to ramp up efforts to educate the newly regulated public about the forthcoming rules, especially given the significant penalties for noncompliance. “If our customers do not know about the rule, they will not know they need to comply with it, which means they will be in a position to violate the rule,” Selenke said. “We take care of our customers, and we think of them as the good guys. The last thing we want is to see any rule risk turning good guys into bad guys because they failed to comply with a law they were not aware existed.”