ABA filed comments on the Financial Crimes Enforcement Network's (FinCEN) request for information on Customer Due Diligence (CDD) requirements for financial institutions. FinCEN is considering proposing a rule that would (i) codify, clarify, consolidate, and strengthen existing CDD regulatory requirements and supervisory expectations, and (ii) establish a categorical requirement for financial institutions to identify the beneficial ownership of accountholders that are legal entities.
ABA believes that the new rules would pile on to the burden and consume resources that could be better used – and can interfere with a successful BSA/AML effort. "While ABA strongly supports meaningful efforts to detect and deter money launderers and terrorists, we also believe it is critical to ensure that any new requirement be materially useful to that end, that it serves a demonstrated need," ABA said in the comment letter. "Before even considering moving forward, it is incumbent on FinCEN to demonstrate what weakness or gap in existing protocols must be addressed." ABA welcomes further outreach and discussion by all interested parties on the impact and merits associated with FinCEN’s request for information and looks forward to continuing to work with FinCEN.