Beneficial Ownership Regulatory Relief Far From Assured

Source: American Banker

The Corporate Transparency Act was supposed to make financial institutions’ anti-money-laundering compliance burdens lighter, but more than a year since the landmark law’s passage, experts say that outcome is far from assured.

Signed into law in early 2021, the Corporate Transparency Act requires businesses to report their beneficial ownership information directly to a registry database maintained by the Financial Crimes Enforcement Network. The reform was intended to crack down on the use of anonymous shell companies in the U.S. — a frequent component of modern illicit finance and tax-avoidance schemes.

But as Fincen’s rulemaking process to implement the CTA unfolds in the coming months and years, legal analysts and banking advocates say it’s unclear whether the industry will see the relief touted by lawmakers who supported the law’s passage. They also warn that the regulatory road to securing that relief will be a long one.