WASHINGTON—The Beneficial Ownership Information (BOI) database established under the Corporate Transparency Act (CTA) should provide significant and important relief for credit unions from the Financial Crimes Enforcement Network’s (FinCEN) customer due diligence (CDD) requirements, America’s Credit Unions wrote.
Comments were sent in response to FinCEN’s proposed information collection regarding BOI requests.
America’s Credit Unions’ Luke Martone called on FinCEN to release such instructions and guidance on the form and manner of BOI requests as soon as possible.
Information on Process Needed
“Although credit unions and other financial institutions will not have access to the database until later this year, it is important that they have detailed information on the process now in order to make any necessary system updates and train staff,” Martone wrote, calling for development of rules in a way that allows credit unions and other financial institutions to comply as efficiently as possible.
“Any opportunity to avoid a manual data input function, particularly on a back-office compliance team that might already be under-resourced, could significantly reduce the compliance burden on credit unions,” Martone further wrote.
Martone also encouraged FinCEN to work with the financial institutions that will be accessing the BOI database on a regular basis to “better understand where pain points may exist” and update the process as appropriate.”
Letter Sent on AML/CFT Updates
Separately, in another letter to FinCEN, ACU said updating anti-money laundering and countering the financing of terrorism (AML/CFT) rules and regulations would relieve significant—and increasing—compliance burdens on credit unions.
ACU wrote to the FinCEN in response to a FinCEN request for comment on Currency Transaction Report (CTR) filing.
“The current CTR threshold [of $10,000] simply does not serve the goals and original intent of the Bank Secrecy Act (BSA). Further, the balance between useful reporting and burden on credit unions is wildly disproportionate,” wrote Martone. “The current threshold should be increased to account for inflation and economic changes over the past several years. America’s Credit Unions urges FinCEN to use its existing authority to increase the threshold to $30,000.”
Need to Adjust for Inflation
Martone added that the $10,000 threshold was established in 1972 upon enactment of the Bank Secrecy Act and would exceed $75,000 if adjusted for inflation as of February 2024.
“While the individual reports themselves do not take significant time to file, credit unions report that the ‘sheer volume’ of CTR reporting is a compounding burden on credit union resources and staff time,” Martone said. “Credit unions have reported that their CTR filings have increased by up to 40% year-over-year during the last five years.”
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