October 23, 2019

House passes NAFCU-sought BSA/AML, beneficial ownership reforms

Llewisast night, the House passed NAFCU-sought legislation – the Corporate Transparency Act of 2019 and COUNTER Act of 2019 – which would help modernize Bank Secrecy Act (BSA) and anti-money laundering (AML) requirements along with allowing financial institutions to access important beneficial ownership information about companies they serve.

"NAFCU applauds House passage of H.R. 2513 the Corporate Transparency Act of 2019 and COUNTER Act of 2019, which will make important improvements to the BSA/AML regime, and help prevent bad actors from gaining access to our nation's financial system through cloaked identities," said NAFCU President and CEO Dan Berger. 

"More so, it will better equip financial institutions for compliance with FinCEN's Customer Due Diligence rule and encourage greater coordination between law enforcement and regulators on BSA/AML priorities, among other essential reforms," added Berger.

Ahead of the vote, NAFCU Vice President of Legislative Affairs Brad Thaler sent a letter to House leadership calling the bills "an important first step to improve the BSA/AML regulatory compliance regime for community institutions such as credit unions." Thaler also identified key provisions that would be helpful to credit unions, including:

  • requiring companies to disclose their true "beneficial owners" to FinCEN for the creation of a database of beneficial ownership information that would be available to law enforcement agencies and financial institutions;
  • encouraging more coordination between law enforcement and credit union examiners on BSA/AML priorities; 
  • directing the Treasury to study how currency transaction report (CTR) and suspicious activity report (SAR) requirements can be streamlined to ensure that law enforcement is receiving necessary information while reducing burdens on financial institutions;
  • indexing the CTR threshold to inflation;
  • directing FinCEN to study and design a modified SAR that would reduce compliance burdens on financial institutions; and
  • increasing information sharing and allowing the sharing of compliance resources.

"We thank Rep. Carolyn Maloney and Rep. Emanuel Cleaver for their work on this important legislation, and Chairwoman Maxine Waters and Speaker Nancy Pelosi for bringing the bill to the House floor for a vote," stated Berger after the House passed the final bill. "We encourage the Senate to swiftly act on this important topic."

A NAFCU witness has previously testified on the need for BSA/AML reforms, and the association will encourage the Senate to consider this important legislation.