WASHINGTON–The Financial Crimes Enforcement Network Provides (FinCEN) has released an update to an earlier statement on complying with BSA obligations during the coronavirus pandemic.
The update provides additional information to assist financial institutions in complying with their Bank Secrecy Act (BSA) obligations during the pandemic and announces a direct contact mechanism for urgent COVID-19-related issues. FinCEN said it recognizes financial institutions face challenges related to the COVID-19 pandemic, and that in order to ensure the success of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including the need to facilitate expeditious disbursal of CARES Act funds, additional relief must be made available.
BSA Compliance
FinCEN said it expects financial institutions to continue following a risk-based approach with the Bank Secrecy Act and to diligently adhere to their BSA obligations.
“FinCEN also appreciates that financial institutions are taking actions to protect employees, their families, and others in response to the COVID-19 pandemic, which has created challenges in meeting certain BSA obligations, including the timing requirements for certain BSA report filings,” the organization said. “FinCEN will continue outreach to regulatory partners and financial institutions to ensure risk-based compliance with the BSA, and FinCEN will issue additional new information as appropriate.”
Beneficial Ownership Information Collection Requirements for Existing Customers
FinCEN noted one of the primary components of the CARES Act is the Paycheck Protection Program (PPP), and that for eligible federally insured depository institutions and federally insured credit unions, PPP loans for existing customers will not require re-verification under applicable BSA requirements, unless otherwise indicated by the institution’s risk-based approach to BSA compliance.
For non-PPP loans, FinCEN said it is reminding financial institutions of its Sept. 7, 2018 ruling (FIN-2018-R004) offering certain exceptive relief to beneficial ownership requirements.
“To the extent that renewal, modification, restructuring, or extension for existing legal entity customers falls outside of the scope of that ruling, FinCEN recognizes that a risk-based approach taken by financial institutions may result in reasonable delays in compliance,” the organization said.
FinCEN said it will continue to assess reasonable risk-based approaches to BSA obligations and will issue further information, as appropriate, particularly as the CARES Act is implemented.
BSA Reporting Obligations & Updates to Currency Transaction Report (CTR) Filing Obligations
FinCEN said it has heard from certain financial institutions and trade associations for financial institutions about difficulties in meeting certain BSA obligations, including the timing requirements for certain BSA report filings.
“In response to concerns regarding certain timing requirements of BSA filings, FinCEN recognizes that certain regulatory timing requirements with regard to BSA filings may be challenging during the COVID-19 pandemic and that there may be some reasonable delays in compliance,” FinCEN said. “FinCEN hereby suspends implementation of the February 6, 2020 ruling (FIN-2020-R001) on CTR filing obligations when reporting transactions involving sole proprietorships and entities operating under a ‘doing business as’ (DBA) name (the 2020 Ruling) until further notice. FinCEN will issue further information on these types of CTR filings at an appropriate time with reasonable implementation periods.”
FinCEN said until such issuance, financial institutions should continue to report transactions involving sole proprietorships and DBAs under prior practice. Those financial institutions that have already made the necessary changes to comply with the 2020 Ruling need not revert to prior practice, and may report CTRs in accordance with the now-suspended ruling.
New FinCEN COVID-19 Online Contact Mechanism
FinCEN reported it has created a COVID-19-specific online contact mechanism, via a specific dropdown category, for financial institutions to communicate to FinCEN COVID-19-related concerns while adhering to their BSA obligations. Financial institutions that wish to communicate such COVID-19-related concerns to FinCEN must go to www.FinCEN.gov, click on “Need Assistance,” and select “COVID19” in the subject dropdown list, FinCEN said.
Such COVID-19-related communications are strongly encouraged but not required, it added.
Encouragement of Innovative Efforts and Other Reminders
FinCEN said it is encouraging financial institutions to “consider, evaluate, and, where appropriate, responsibly implement innovative approaches to meet their BSA/anti-money laundering compliance obligations, in order to further strengthen the financial system against illicit financial activity and other related fraud.”