On June 28, 2024, in an effort to bolster financial institutions’ anti-money laundering and countering the financing of terrorism (“AML/CFT”) programs, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a proposed rule that would enumerate the minimum components required to be included within financial institutions’ AML/CFT programs.
Effective January 1, 2021, the National Defense Authorization Act for Fiscal Year 2021 (the “Act”) became law. Among other provisions, the Act contains the most significant changes to the Bank Secrecy Act (the “BSA”) since 2001. Most significantly, the Act requires the Department of the Treasury, through the Financial Crimes Enforcement Network (“FinCEN”), to adopt regulations within one year that will establish a framework by which smaller, closely held businesses, regardless of the type of enterprise (e.g., corporation, limited liability company or partnership) will be required to disclose their beneficial ownership to FinCEN.
Continue Reading BSA/AML Update: Significant New Requirements Ahead
On May 11, 2018, compliance with the beneficial ownership rule became mandatory. In accordance with the rule, a covered financial institution must verify, at the time a new account is opened, the beneficial owners opening the account on behalf of a legal entity customer. For purposes of the rule, any rollover or renewal of an existing account is deemed to be an opening of a “new” account. Despite the clarity of the regulation, many financial institutions are not certain how they are to comply with the beneficial ownership requirements when many renewals of loan accounts and rollovers of certificates of deposit (CDs) are automated.
Continue Reading BSA/AML ALERT: FinCEN Grants a 90-Day Exemption from the Beneficial Ownership Rule for Certain Financial Product Renewals and Rollovers
On May 11, 2018, the beneficial ownership rule became fully effective. While the rule was finalized on July 16, 2016, compliance was not mandatory until May 11, 2018. The delay in implementation was to permit covered financial institutions to ready their BSA/AML compliance programs.
In accordance with the rule, a covered financial institution must verify,