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FinCEN Begins Accepting Beneficial Ownership Reports; League Notes Issues for CUs

1/8/2024

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has started to accept beneficial ownership information reports, in accordance with the Corporate Transparency Act. Treasury Secretary Janet Yellen said Monday the department's Financial Crimes Enforcement Network has received more than 100,000 filings disclosing true owners of U.S.-based companies to be stored in a congressionally mandated registry aimed at cracking down on shell companies.

The act, enacted in 2021, is designed to curb illicit finance. It requires many companies doing business in the United States to report information about the individuals who ultimately own or control them.

“The launch of the United States’ beneficial ownership registry marks a historic step forward to protect our economic and national security,” Secretary of the Treasury Janet Yellen said. “Corporate anonymity enables money laundering, drug trafficking, terrorism, and corruption. It harms American citizens and puts law-abiding small businesses at a disadvantage. Having a centralized database of beneficial ownership information will eliminate critical vulnerabilities in our financial system and allow us to tackle the scourge of illicit finance enabled by opaque corporate structures.”

As for credit union impact - credit unions themselves are exempt from being required to report. However, credit unions will still be impacted by this rule. Credit unions that offer commercial accounts have been obtaining beneficial ownership information during account opening since May 2018, when the customer due diligence (CDD) rule became effective. Now, with this new rule, businesses will be reporting beneficial ownership information directly to FinCEN, as well. Again, it's important to note credit unions are still required to obtain and verify their members’ BOI to satisfy customer due diligence (CDD) requirements.

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