NCUA exam priorities: What to expect in 2020

Beneficial ownership database will ease CDD compliance

May 5, 2021

CUNA supports creating a beneficial ownership information database, as it would shift the burden of collecting beneficial ownership information from credit unions to the Financial Crimes Enforcement Network (FinCEN).

FinCEN issued an advance notice of proposed rulemaking regarding reporting requirements for beneficial ownership information under the Corporate Transparency Act (CTA). The CTA requires certain legal entity companies to submit beneficial ownership information directly to FinCEN.

FinCEN will maintain that information in a secure, non-public database accessible by appropriate law enforcement agencies, federal regulatory authorities, and financial institutions subject to customer due diligence (CDD) requirements under the Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) requirements.

“Credit unions are highly supportive of the creation of the beneficial ownership database and believe it will greatly ease meeting customer due diligence obligations under the Bank Secrecy Act (BSA) and its implementing regulations,” CUNA’s comment letter reads.

The letter also notes:

  • FinCEN should require reporting companies to provide the same information regarding beneficial owners that financial institutions are required to collect to complete their CDD obligations.
  • Financial institution access to beneficial ownership information should be as simple and streamlined as possible. Notification of change in beneficial ownership statuses pulled from the FinCEN database should automatically be reported to financial institutions;
  • FinCEN should consider an initial beta-testing period that involves institutions of various sizes and complexity to identify problems; and
  • As the database nears finalization, FinCEN should also offer trainings illustrating the operation of the database and use of the information for credit unions.