Letter in response to the request of the FinCEN for comment on the ANPRM regarding Beneficial Ownership Information Reporting Requirements

SUMMARY 

The Compliance Committee submitted a letter in response to the request from the Financial Crimes Enforcement Network (“FinCEN”) for comment on its April 5, 2021 Advance Notice of Proposed Rulemaking (the “ANPRM”). The letter focuses on the portion of the ANPRM relating to FinCEN’s disclosure to financial institutions (“FI”) of the beneficial ownership information (“BOI”) that reporting companies must file with FinCEN under the Corporate Transparency Act (the “CTA”). The letter supports FinCEN’s proposal to disclose BOI, with the reporting company’s consent, to FIs to assist with their customer due diligence (“CDD”) requirements with three recommendations:  (i) FIs should be able to use BOI not only for CDD, but also for other customer identification purposes, such as verifying Customer Identification Program (“CIP”) information; (ii) FinCEN should process and approve pre-authorization requests within 48 business hours, and share BOI with authorized FIs in real time, utilizing a secure shared database buttressed by cybersecurity and fraud mitigation protocols; and (iii) FIs should receive not only the information reporting companies are required to provide to FinCEN under the CTA, but also a copy of an unexpired government-issued photo identification sufficient to satisfy FIs’ CIP requirements.