FinCEN Eyes Finalizing Narrowed BOI Reporting Rule, Agency Head Says
The Financial Crimes Enforcement Network, which issued an interim final rule in March to revise its implementation of the Corporate Transparency Act (CTA), is reviewing public comments on it to help write a final rule, Director Andrea Gacki said Sept. 9.
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“We will be carefully reviewing the responses to our interim final rule to see if any adjustments need to take place,” Gacki testified before the House Financial Services Subcommittee on National Security, Illicit Finance and International Financial Institutions. “We look forward to reviewing all comments on all sides.”
The interim final rule removes a Biden-era requirement for U.S. companies and persons to report their beneficial ownership information to FinCEN. With the change, the reporting requirement will apply only to foreign firms (see 2503030042).
FinCEN plans to issue the final rule "this calendar year," Gacki said. To address data security concerns, she added, the agency intends to delete information that U.S. small businesses filed under the CTA before they were removed from the reporting requirement.
The CTA was enacted in 2021 to help the government prevent sanctioned parties and others from hiding money or property in the U.S. But Republican lawmakers argued that the Biden administration’s implementation of the CTA was more complicated than Congress envisioned (see 2402140044), a point Rep. Warren Davidson, R-Ohio, and Sen. Jim Banks, R-Ind., reiterated in a Sept. 8 letter to Treasury Secretary Scott Bessent. Congressional Democrats, however, argue the Trump administration is ignoring the intent of the CTA.
With U.S. businesses removed from the reporting requirement, Gacki said, she believes law enforcement will be able to turn to other sources of information to address domestic companies involved in financial crimes. One such source is FinCEN’s Customer Due Diligence Rule, which requires financial institutions to collect company ownership information when accounts are opened, she said.
Also during the hearing, Gacki said FinCEN’s recent designation of three Mexico-based financial institutions as primary money laundering concerns prompted the Mexican government to “intervene and take steps to directly oversee the three named institutions and their compliance activities.”
While the designations are intended to block U.S. banks, securities brokers and other money services businesses from transmitting certain funds involving the Mexican institutions (see 2506260014), FinCEN granted extensions to their effective date to ensure "any innocent people, to include innocent Americans, innocent Mexican citizens, were able to extricate their funds from these institutions," Gacki said.
In addition, Gacki said FinCEN will look into allegations by Rep. Maria Salazar, R-Fla., that 11 companies in the lawmaker’s congressional district are trying to evade U.S. sanctions on Cuba. Salazar sent a letter about the matter to Bessent and Secretary of State Marco Rubio in August (see 2508270025).