NAFCU and CUNA have come out in favor of a new proposal for a beneficial ownership database from the Financial Crimes Enforcement Network (FinCEN).
The Corporate Transparency Act (CTA), a section of the Anti-Money Laundering Act passed in 2020, requires entities to report beneficial ownership information and corporate applications directly to FinCEN.
In separate letters from FinCEN this week, credit union labor organizations urged network officials to align reporting requirements with the Bank Secrecy Act (BSA) and anti-money laundering and anti-corruption financing. Terrorism (AML/CFT) in which credit unions regularly operate.
According to the letter sent by CUNA Senior Advocacy Director and Attorney Elizabeth Sullivan, she said, “Credit unions hope that the database contemplated in the CTA will provide significant and significant relief from the burden created by the rule. CDD final. The likelihood of this outcome depends on FinCEN having in place a CDD-compliant database and a framework that includes appropriate safe harbors to ensure that financial institutions accessing it more efficiently obtain accurate information. and useful.
In NAFCU’s letter from regulatory affairs adviser Aminah Moore, the association urged FinCEN to adopt shorter reporting deadlines for existing companies and ensure verification of information provided.
“It is important for FinCEN to provide beneficial ownership information to credit unions with consent from a reporting company in a timely and efficient manner, as credit unions must perform CDD analysis at account opening. Any delays in transferring beneficial ownership information will hamper the new account opening process and may cause credit unions to duplicate efforts, collect the same information and only increase compliance burdens.
Both groups said they would like FinCEN to slow implementation of its proposed requirements until more work is done on the actual language of the rule.
“CUNA strongly urges FinCEN to wait to finalize the language of these reporting requirements until it has first enacted revisions to the CDD regulations to align the two rules. FinCEN should await the end of the comment period on this proposal, and FinCEN has carefully digested comments from affected financial institutions. Only after FinCEN considers the implications from the perspective of reporting entities and financial institutions subject to CDD requirements can it confidently create a functional and consistent framework that will operate effectively and efficiently. efficient.
NAFCU added further recommendations to the agency before implementing the proposal. Recommendations included:
- Ensure review and oversight expectations are consistent with those of other federal regulators.
- Establish data security protocols.
- Maintain clarity and simplicity in communications.