FinCEN Allows 90-Day Exception from the Beneficial Ownership Rule
The Financial Crimes Enforcement Network (FinCEN) issued a ruling on Wednesday, May 16, allowing covered financial institutions a 90-day exception from the newly applied Bank Secrecy Act (BSA) - Beneficial Ownership Rule in respect to certificates of deposit and loan renewals.
“FinCEN grants an exception to covered financial institutions for 90 days, up to and including August 9, 2018, from the Beneficial Ownership Rule’s requirements to identify and verify beneficial ownership information for rollover or renewal of certain financial products and services (i.e., CD and loan accounts) that were established before May 11, 2016.” (FIN-2018-R002, www.fincen.gov)
The beneficial ownership requirement (31 CFR § 1010.230), states that covered institutions such as banks, savings institutions, credit unions and other entities must collect beneficial ownership information on new accounts. When FIs perform CD rollovers and loan renewals, they are counted as new accounts. However, since many covered institutions do not treat these rollovers and renewals as new accounts, there was concern that they were not complying with the new requirements.
The ruling states, “FinCEN believes that further consideration of this issue is appropriate,” and will be using the 90 days to explore and discuss suitable action.