BPI Supports FinCEN Effort to Stem Shell-Company-Enabled Money Laundering

What’s happening:

BPI filed a comment letter today on a Financial Crimes Enforcement Network (FinCEN) proposal intended to stem the illicit cash flow from terrorists, sex traffickers, kleptocrats and other bad actors.

What is BPI saying:

“Congress’s success in overcoming legislative hurdles and passing AML/BSA reform will go a long way toward disrupting the illicit financial system relied upon by terrorists, sex traffickers and other bad actors. BPI supports FinCEN’s ongoing efforts to implement these laws and continues to believe that the beneficial ownership registry must serve as a centralized source of information that law enforcement and banks can utilize to detect and deter criminal activity.” — Angelena Bradfield, Senior Vice President, AML/BSA, Sanctions & Privacy

Why does it matter:

For too long U.S. law provided terrorists, sex trafficker, kleptocrats and other bad actors with a loophole to exploit our financial system. FinCEN is working to implement the Corporate Transparency Act and the Anti-Money Laundering Act, which will help close these loopholes that created safe havens for criminals.

BPI has long advocated for congressional and regulatory efforts to modernize the U.S. AML/CFT regime and is committed to working with FinCEN as it develops a more effective and efficient beneficial ownership framework.

What does the comment letter recommend?

  • Implement clear and consistent rules. There should be clear and consistent standards between what’s required under the Corporate Transparency Act, and what’s required under the Customer Due Diligence Rule.
  • Maintain accurate, reliable and useful data. Banks should be able to use the information stored in the registry to comply with customer due diligence obligations. FinCEN should implement measures to verify the information and create a registry that law enforcement and financial institutions depend on as accurate and reliable.
  • Make the registry easy to use, easy to access and real-time. Banks are unlikely to use the registry if they cannot rely on the data or aren’t able to query the registry in real time. Additionally, there needs to be a straightforward process for how banks can permissibly obtain access to beneficial owner information.

A little background:

  • Legislation to reform the anti-money laundering framework and end anonymous shell companies passed in January 2021.
  • BPI, under its predecessor organization The Clearing House Association, authored a report calling for AML/BSA reform in 2017.
  • BPI helped build a diverse coalition of stakeholders in support of the reforms. Stakeholders include non-profits, national security experts, law enforcement and business associations.
  • BPI submitted a comment letter to FinCEN in May 2021 proposing recommendations to help make the beneficial ownership registry mandated by the Corporate Transparency Act useful to law enforcement and banks.
  • BPI issued a statement in December 2021 supporting FinCEN’s continued efforts to implement these important rules, which will require certain businesses to report beneficial ownership information to the Bureau.


About Bank Policy Institute.

The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.

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