FinCEN finalizes rule on beneficial ownership information access

The Financial Crimes Enforcement Network issued a final rule that establishes the framework for access to and protection of beneficial ownership information.

Details: The final rule prescribes the circumstances under which BOI reported in compliance with FinCEN’s September 2022 BOI reporting rule may be disclosed to agencies, governments, and financial institutions as well as how this information must be protected. The 2022 rule requires most U.S. corporate entities to report to FinCEN information about their beneficial owners—those who ultimately own or control the company.

Agency Guidance: FinCEN also issued interagency statements for banks and nonbanks on the interplay between the final rule and the agency’s existing customer due diligence rule. The guidance notes that financial institutions subject to customer due diligence requirements, including banks, are authorized recipients of BOI.

ICBA View: In comments to FinCEN earlier this year, ICBA urged the agency to maximize community bank flexibility under the rule and continued its call for FinCEN to withdraw BOI requirements for banks now that it is required to collect this information directly from reporting companies.

Background: The final rule is the second of three key rulemakings implementing the Corporate Transparency Act—which passed as part of the Anti-Money Laundering Act—to strengthen the integrity and transparency of the U.S. financial system.

• The September 2022 BOI reporting rule takes effect Jan. 1, the same day FinCEN plans to launch a BOI technology system to securely collect, process, and store that information.

• The new final rule regarding BOI access is effective Feb. 20 and will be deployed in phases to authorized government agencies and financial institutions.

• FinCEN will undertake a third rulemaking to revise its current customer due diligence rule, as required by the CTA.

More: Additional information on the new rule is available in a FinCEN fact sheet on the rule and via the agency’s BOI webpage.