The League advocates for beneficial owner transparency

Published by: Emily Leite

May 5, 2021 | Government Affairs, Regulatory

Customer due diligence (CDD) requirements are the bedrock to protecting your credit union from the liability that comes with non-compliance with the Bank Secrecy Act and its implementing regulations. Moreover, CDD requirements help protect commerce against bad actors that would use it to accomplish goals that could be harmful to the public. One major component of CDD is beneficial ownership information.

The Financial Crimes Enforcement Network (FinCEN) has published an Advanced Notice of Proposed Rulemaking (ANPRM) seeking feedback on the implementation of the Corporate Transparency Act (CTA). The CTA was part of the National Defense Authority Act signed into law on Jan. 1, 2021. The CTA requires certain business entities to submit their beneficial owner information directly to FinCEN, which is then authorized to disclose that beneficial ownership information to financial institutions attempting to comply with their CDD requirements.

To make it easier for credit unions to comply with their CDD requirements, the League submitted a comment letter to FinCen urging them to consider streamlining the process by which credit unions can access beneficial ownership information. Rather than ask permission to access records for each member-business, the League believes credit unions should have access to that data by default, thereby making it easier to complete their compliance requirements. This would also make it easier for them to guard against bad actors during their relationship with member-businesses because they would be able to quickly review their records as problems arise.

To that end, the League supports ideas like a preapproval process that would allow preapproved credit unions to bypass the need to ask permission from FinCen for beneficial owner information. Please find the League’s comment letter here. If you have any questions about FinCen’s Beneficial Owner ANPRM, or about the League’s comment letter, please contact League Regulatory Counsel Chris Noble.

CONTACT US

E: cnoble@ohiocul.org
T: (614) 923-9762
C: (614) 448-6237

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