Community bankers asks for one-year delay of FinCEN ownership rule

The Independent Community Bankers of America (ICBA) is urging the Financial Crimes Enforcement Network (FinCEN) to delay a rule requiring banks to identify the owners of their corporate clients.

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FinCEN’s recently released frequently asked questions outlining the guidelines for beneficial ownership. It said financial institutions must collect information individuals who own 25 percent or more of the equity interests in the client company and the controlling owner.

Since the FAQs were released just a month or so out from the implementation date of this rule on May 11, ICBA is asking for a one-year delay for the industry to adequately prepare and get into compliance with this new guideline.

“Given that FinCEN took nearly two years to address some of the questions and ambiguities in the rule, it is clear this rule is complex and requires ample time, not only for developing adequate policies and procedures, but developing changes in the systems and testing the changes to ensure compliance as well as training employees on the updated procedures and systems,” ICBA officials wrote in a letter to the agency.

An extension would not only give financial institutions more time to prepare for the rule, it would also allow regulators time to finalize their preparations. Further, ICBA supports statutory changes that would require beneficial ownership information to be collected and verified by appropriate agencies at the time a legal entity is formed.