States need same ‘beneficial ownership’ info too

(May 7, 2021) State regulators must have access to the same “beneficial ownership” information that federal agencies will have under legislation adopted last year, and made available through a database, NASCUS wrote in a comment to FinCEN submitted this week.

In response to an advance notice of proposed rulemaking (ANPR) issued early last month, NASCUS wrote that to “maintain a seamless and effective oversight of the BSA/AML, FinCEN must include state regulators in the implementation of the Corporate Transparency Act (CTA) to the same extent as federal agencies.”

The CTA, adopted as part of last year’s National Defense Authorization Act (NDAA), allows that the beneficial ownership information submitted to FinCEN may be disclosed to financial institutions (including credit unions) in their compliance with BSA/AML customer due diligence (CDD) requirements. “Beneficial owners” are those individual natural persons who ultimately own or control the reporting companies.

The state system said it supports strengthening the Bank Secrecy Act/anti-money laundering (BSA/AML) framework, and will work with FinCEN as the beneficial ownership database is developed and the CTA implemented. However, NASCUS urged FinCEN to develop a database that reduces information and collection verification burden on credit unions.

“Credit unions and other financial institutions already bear a substantial BSA/AML regulatory burden to safeguard the financial system and work diligently to fulfill their responsibilities,” NASCUS wrote. “Designing the Beneficial Ownership Database in a manner that eases related customer due diligence requirements would allow financial institutions to re-allocate resources to monitoring and other BSA/AML obligations resulting in a more secure financial system.”


Comment: Beneficial Ownership Information Reporting Requirements