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Lawmakers echo NAFCU concerns about BOI reporting ‘escape hatch’
A bipartisan group of lawmakers, including House Financial Services Committee Chairman Patrick McHenry, R-N.C., and Senate Banking Committee Chairman Sherrod Brown, D-Ohio, called on the Financial Crimes Enforcement Network (FinCEN) to amend the proposed beneficial ownership information (BOI) reporting form, citing similar concerns as NAFCU about companies being able to avoid providing critical information.
The lawmakers argued the proposed reporting form provides companies with an “escape hatch” by giving the option to answer required questions with “unknown” or “unable to identify/obtain” responses.
“It is disappointing that this Notice deviates significantly from Congress’ intent,” the lawmakers wrote to Treasury Secretary Janet Yellen and FinCEN Acting Director Himamauli Das. “The beneficial ownership reporting regime was intended to be a strategic tool to target bad actors and nation-states like Russia and China who are abusing our financial system to engage in illicit activity.
“At the same time, Congress was clear regarding its intent to enhance the customer due diligence efforts of financial institutions, improve information available to law enforcement and other agencies, and minimize the burdens on small businesses tasked with reporting information to FinCEN.”
Last month, NAFCU Senior Regulatory Affairs Counsel Aminah Moore provided feedback to FinCEN on the BOI reporting form and raised concerns that it “can be completed without providing information about any individuals associated with the reporting company, which undermines the [Corporate Transparency Act (CTA)] and defeats the purpose of the beneficial ownership reporting final rule.”
NAFCU will continue to engage FinCEN on this issue and ensure related rulemakings allow credit unions to effectively comply with the CTA and customer due diligence requirements.