United States

Further guidance possible for FinCEN’s beneficial ownership rule


Financial Crimes Enforcement Network (FinCEN) Acting Director Jamal El-Hindi indicated that his agency was considering additional guidance to provide clarification for financial institutions with questions remaining ahead of the new beneficial ownership rule’s effective date of May 11, 2018. Under the rule, financial institutions are required to collect information on beneficial owners—defined as individuals who own more than 25 percent of the interest in a company, or a single individual who exercises control over the company—at the time of account opening. At the ABA/ABA Financial Crimes Enforcement Conference held in early December, FinCEN officials indicated that the agency was finalizing a new set of frequently asked questions (FAQs), and regulators similarly indicated that an update to the Federal Financial Institutions Examination Council (FFIEC) manual to incorporate new information on beneficial ownership was forthcoming.

A few of the remaining questions for many institutions focus on whether recertification of beneficial owners is required for certificates of deposits that automatically renew, and the level of verification needed each time a new account is opened for an existing legal entity customer. For instance, should an unexpired driver’s license already on file with a financial institution be requested each time a new account is opened?