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NAFCU offers FinCEN recommendations on beneficial ownership reporting
NAFCU’s Aminah Moore wrote to the Financial Crimes Enforcement Network (FinCEN) Friday in response to a notice of proposed rulemaking (NPRM) implementing section 6403 of the Corporate Transparency Act (CTA), which governs beneficial ownership reporting requirements.
The CTA and Anti-Money Laundering Act (AMLA) were passed as part of the fiscal year 2021 National Defense Authorization Act and included NAFCU-sought language to require corporations, limited liability companies, and similar entities to disclose their true beneficial ownership information to FinCEN to create a new nonpublic database.
The NPRM describes who must file reports with FinCEN, what information must be provided, and when the report must be filed to identify the beneficial owner of the entity and the individuals who have filed an application to form the entity or registered it to do its business. In the letter, Moore, NAFCU's regulatory affairs counsel, offered support for the proposed rule and thanked FinCEN for its commitment to implementing the FinCEN Database and its swift implementation of section 6403 to combat illicit activity in the U.S. financial system.
In addition, Moore offered the agency several recommendations, calling for the agency to specifically:
- ensure that examination and supervisory expectations are consistent with those of other federal regulators;
- establish data security protocols; and
- maintain clarity and simplicity in its communications.
Moore also urged FinCEN to adopt shorter reporting timeframes for existing companies and ensure verification of information provided.
For more information on the NPRM, NAFCU previously sent members a Regulatory Alert breaking down what credit unions need to know. NAFCU is supportive of Bank Secrecy Act (BSA)/AML reform efforts and believes the FinCEN database will have “the potential to allow for a meaningful reduction in compliance burdens.” Read Moore's full letter.