Difficult to assess FinCEN’s beneficial ownership reporting proposals say US banks

The American Bankers Association (ABA) has responded to the proposal by the US treasury department’s Financial Crimes Enforcement Network (FinCEN) for revised rules on beneficial ownership information reporting requirements (Trade-based Financial Crime, 30 December 2020).

The association says it supports the creation of the registry but, because the FinCEN proposal is only the first of a three-part regulatory scheme to implement the beneficial ownership registry, it is difficult to assess how these reporting requirements fit with bank responsibilities.

Therefore “it is difficult, if not impossible,” to determine whether this proposal meets the congressional expectation for FinCEN to take steps to eliminate duplicative requirements and to reduce burden, the ABA said in a comment letter to the US financial watchdog.

Major undertaking

Bankers canvassed by the ABA for their views on the proposal said there were differences between the proposed and existing rules and that to reconcile these differences banks will need to take extensive steps to update systems and procedures.

“This will be a major undertaking that will divert resources from other efforts, undermining FinCEN’s goal to encourage effectiveness and efficiency,” the letter says.

ABA recommendations

In a series of recommendations, the ABA suggests that FinCEN takes steps to validate the information that is submitted to the registry and clarify the definition of a reporting company.

The association also wants FinCEN to clarify the information a reporting company must submit and develop a clear plan for educating reporting companies about the requirements.

The ABA’s Letter to FinCEN on Beneficial Ownership Information Reporting Requirements can be found here.


Categories: Trade Based Financial crimes News

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