While the Financial Crimes Enforcement Network’s final rule on access to beneficial ownership information addressed many concerns raised by banks with the original proposal, the agency should take additional actions to improve the implementation of the Corporate Transparency Act, the American Bankers Association said today.
FinCEN last year issued a final rule on BOI access that included several significant revisions sought by ABA from the original proposal, including language that allows banks to use the information for a range of Bank Secrecy Act and sanctions compliance purposes. In a statement to the House Financial Services Committee, which held an oversight hearing on FinCEN and the Office of Terrorism and Financial Intelligence, the association listed several improvements that would further enhance implementation of the final rule.
One such improvement would be for FinCEN to provide timely guidance necessary to allow reporting companies, including bank trust services, to accurately comply with the rule. Another would be to provide additional education for small businesses about the new reporting requirements, and to provide a paper filing option for those that cannot file electronically. In his testimony at the hearing, Under Secretary for Terrorism and Financial Intelligence Brian Nelson said FinCEN was working on a solution for paper filing.
ABA also said FinCEN should ensure that any revisions to the customer due diligence rule reduce rather than increase unnecessary and duplicative burdens on banks. “Although the revisions made to the final access rule were helpful, banks believe that FinCEN should take additional steps to ensure that implementation of the CTA is consistent with congressional intent,” the association said.
FinCEN collects over 500,000 BOI reports
More than 500,000 beneficial ownership information reports have been filed with FinCEN since it began collecting reports on Jan. 1, FinCEN Director Andrea Gacki said during the oversight hearing. Roughly 32 million businesses will be required to file BOI reports with FinCEN, with existing companies having until the end of the year to file a report, meaning that 98.5% of covered entities must still file. Businesses created after Jan. 1 have 90 days to file a BOI report, which will be shortened to 30 days starting in 2025.
“The now-ongoing vetted collection of beneficial ownership information paired with the forthcoming phased provision of access to the [BOI] database by law enforcement and other authorized users will close with has long been identified as a gap in the United States anti-money laundering and countering the financing of terrorism regime,” Gacki said.
