Home Info Newsroom Can FinCEN Deliver on Promised Regulatory Relief?

Can FinCEN Deliver on Promised Regulatory Relief?

Authored By: Lewis Wood on 10/7/2022

Source: American Banker

The Treasury Department finalized its beneficial ownership rule last week, but left timing on the elements that financial institutions care most about vague. 

The rule is part of the Corporate Transparency Act, which requires businesses to report their beneficial ownership information directly to a registry database maintained by the Financial Crimes Enforcement Network. It's meant to crack down on anonymous shell companies in the United States, and the rule included a major benefit for FIs: getting them out of the business of having to collect beneficial ownership information on their clients. 

FIs have, for years, argued that doing due diligence on their legal entity customers is timely and expensive. The CTA would shift a bulk of that responsibility to legal entities, who would be required to send the information to Fincen's database. Banks would use that database, significantly cutting costs while, they argue, having more effective tools to help law enforcement and police their own accounts. 

But Fincen has yet to build out the database, or introduce rules about who can access it. The bureau also hasn't updated the rule that would modify FIs' due diligence requirements in response to the law's changes. And Fincen didn't give any details on when FIs can expect them to tackle those rules when they finalized the first part of the law last week.

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