Compliance Deadline Comes a Month After Agency Issues FAQs
Washington, D.C (April 24, 2018)—The Independent Community Bankers of America® (ICBA) is calling on the Financial Crimes Enforcement Network (FinCEN) to delay the implementation of a rule requiring community banks and other financial institutions to identify the individuals that own controlling interests in their corporate or business customers. Because FinCEN issued frequently asked questions on the rule just one month before the May 11 compliance deadline, ICBA is requesting a one-year delay.
“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 wrote in a letter to the agency.
FinCEN published its customer-due-diligence final rule in May 2016. The FAQs released earlier this month include information on acceptable means of collecting information, direct and indirect owners, and regulatory thresholds—all important factors as community banks develop policies and procedures to comply with the rule. Further, federal banking regulators have not yet incorporated the final rule into their exam manual, leaving banks without the appropriate tools to ensure full compliance.
A one-year extension of the compliance deadline would give regulators time to finalize their preparations while allowing financial institutions and third-party vendors to fully prepare for the rule, train staff, and update and test systems. Meanwhile, ICBA continues to support statutory changes that would require beneficial ownership information to be collected and verified by appropriate agencies at the time a legal entity is formed.
The Independent Community Bankers of America®, the nation’s voice for nearly 5,700 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit ICBA’s website at www.icba.org.