WASHINGTON–The House has passed the credit union-supported Corporate Transparency Act of 2019 and COUNTER Act of 2019. The legislation passed over strong opposition from the National Federation of Independent Business.
“NAFCU applauds House passage of H.R. 2513 the Corporate Transparency Act of 2019 and COUNTER Act of 2019, which will make important improvements to the BSA/AML regime, and help prevent bad actors from gaining access to our nation’s financial system through cloaked identities,” said NAFCU President and CEO Dan Berger. “More so, it will better equip financial institutions for compliance with FinCEN’s Customer Due Diligence rule and encourage greater coordination between law enforcement and regulators on BSA/AML priorities, among other essential reforms.”
Prior to passage of the bill, CUNA sent a letter expressing its support.
“Credit unions support efforts to track money laundering and terrorist financing, but also believe it is important to strike the right balance between the compliance costs to financial institutions, like credit unions, and the benefits to the federal government,” the letter reads. “As such, we support, HR 2513, which addresses the redundancies, unnecessary burdens, and opportunities for efficiencies within the BSA/AML statutory framework.”
The letter notes that the dollar amounts for reporting thresholds in the BSA/AML framework haven’t been updated since the law’s inception in 1970, and that today’s threshold of $10,000 for Currency Transaction Reports is the equivalent of $1,500 when the law was first passed.
‘Compliance Burden Outweighs Benefits’
“And yet, credit unions are required to report every cash transaction of $10,000 or more, even when the credit union knows that the transaction has no criminal implications,” the letter reads. “This is a clear example of the compliance burden far outweighing the value of the information to law enforcement.”
Opposition from NFIB
Meanwhile, the National Federation of Independent Business said the bill puts America’s small “business owners’ personally identifiable information at unprecedented risk and cost them billions of dollars and millions of hours in paperwork.”
The NFIB added the bill “attempts to shift a responsibility from big banks to America’s smallest businesses, saddling them with an additional 131.7 million hours of paperwork at a cost of $5.7 billion over the first 10 years.”
“The House today not only shouldered millions of small business owners with a tremendous compliance burden but put their personally identifiable information at serious risk,” said NFIB President & CEO Juanita D. Duggan. “The reporting requirements and devastating financial penalties will affect only small businesses, from farmers to franchisees to the mom-and-pop retail shop down the street. It is a big-government solution in search of a small-business problem, and we will not cease our efforts to stand up for small businesses against this serious threat.”
Making Matters ‘Worse’
Making matters “worse,” said the NFIB, is the amendment was included in the final bill that would allow the Treasury Department’s Financial Crimes Enforcement Network to make public certain information, potentially including the individual names, addresses, birth dates, and even the driver’s license numbers of small business owners, despite months of rhetoric about protecting the privacy of small business owners.