American Bankers Association (ABA) and its BAFT subsidiary have urged the Financial Crimes Enforcement Network (FinCEN) to withdraw its proposed rule making customer due diligence requirements under the Bank Secrecy Act explicit and adding a requirement for banks to identify the beneficial owners of customers incorporated as a legal entity.
"The proposal continues to impose substantial new costs on lawful American businesses — and the banks that seek to serve them — without a demonstration of compensating benefits that could not be more efficiently achieved by alternative means," the groups said.
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Under the proposal, banks must identify the natural person or persons that own or control a legal entity that is a customer.
Also, banks would be expected to obtain this information from the customer on a form when an account is opened.
The requirement would apply to all entities except those that are already exempt from FinCEN’s customer identification program rules.
ABA and BAFT termed this initiative as a "new level of government imposed financial surveillance through executive fiat [that] is generally hidden from the average American business men, women, and families who are being presumptively treated as criminal shell companies until certified to the contrary."
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By GlobalDataThe groups also urged FinCEN to conduct a thorough cost-benefit analysis and consult with all parties affected by the rule, including banks, prudential regulators and business customers.
