WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) is being urged to ensure reporting companies are effectively answering questions required by the Corporate Transparency Act (CTA) and the beneficial ownership reporting requirements final rule.
NAFCU Regulatory Affairs Counsel Aminah Moore made the request in a letter to FinCEN in response to the agency’s request for comment on the report that will be used to collect beneficial ownership information (BOI).
The rule, which was finalized by FinCEN in September 2022, implements the first of three CTA requirements and will go into effect Jan. 1, 2024. The rule requires “reporting companies” formed after the effective date to report their BOI within 30 days. In addition, existing reporting entities have one year after the effective date to comply with the rule.
Moore’s letter pointed out that the report, as proposed, allows it to be completed “without providing information about any individuals associated with the reporting company, which undermines the CTA and defeats the purpose of the beneficial ownership reporting final rule.”
Recommendations Made
NAFCU recommended FinCEN remove the “unknown” option and require companies to “attest that they have exhausted all options to obtain the core information.” Moore also requested that the agency require companies to provide the name of beneficial owners.
Moore stated that credit unions are relying on that information to satisfy customer due diligence (CDD) requirements. If a search done by a credit union returns with all the information as “unknown,” Moore remarked that it is “essentially useless and a waste of time” and puts the burden back on the credit union to obtain and verify an entities BOI.
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