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Welcome to the August 2024 summary of news you can use as your bank or other financial institution attempts to stay up to date on the world of BSA/AML compliance. Our monthly series of curated news about financial crime developments, resources and stories.
In this edition, three main stories emerge:
- Federal Reserve Board imposes enforcement action against Customers Bancorp for AML program and risk management deficiencies
- NFIB OpEd highlights major problems with FinCen’s UBO reporting requirements
- FinCen TV ads address low awareness of UBO reporting requirements
Federal Reserve Board imposes enforcement action against Customers Bancorp for AML program and risk management deficiencies
On August 8, 2024, the Federal Reserve Board announced an enforcement action and related agreement with Pennsylvania-based Bancorp stemming from a recent examination by the Fed, as reported by Reuters.
Bancorp offers banking services to digital asset customers and also operates an instant payments platform that allows commercial clients to make tokenized payments over a distributed ledger technology system to other commercial clients of the Bank (“dollar token activities”).
Within 60 days of the effective date of their agreement to address the issues, the board of directors of Bancorp must submit a written plan to the Reserve Bank to strengthen board oversight of the management and operations of Bancorp’s compliance with the BSA/AML requirements and OFAC Regulations.
Read about the Federal Reserve Board action here:
NFIB OpEd highlights major problems with FinCen’s UBO reporting requirements
Congress created a new reporting database that requires more than 32 million small businesses to register personal information of their beneficial owners with the Financial Crimes Enforcement Network (FinCEN). Most businesses must report by January 1, 2025.
However, as the National Federation of Independent Business (NFIB) OpEd states, “83% of small businesses don’t even know the rule exists” regarding their need to report UBO data. “They shouldn’t have to fear that, nor should they have to comply with such a burdensome mandate in the first place,” wrote Jeff Brabant, NFIB Vice President of Federal Government Relations.
The NFIB are not the only stakeholders taking issue with the UBO reporting requirements. As we reported in our October 2023 AML roundup, some US Congressional representatives are against the UBO reporting requirements and have proposed eliminating them as part of the Repealing Big Brother Overreach Act.
Read the NFIB OpEd article here:
Op-ed Highlights Burdens of Beneficial Ownership Reporting (nfib.com)
FinCen TV ads address low awareness of UBO reporting requirements
Most US small businesses are unaware regarding their need to report UBO data to FinCen by January 1, 2025. Those that do not comply face fines and potential criminal penalties. Treasury Secretary Janet Yellen told a House committee in July that FinCEN had received only 2.7 million BOI reports, meaning 92% of US small businesses have not yet reported.
According to the Journal of Accountancy, “As FinCEN continues to try to get the word out to affected small businesses and other stakeholders about the new beneficial ownership information (BOI) reporting requirements, it announced that it has launched a video public service announcement (PSA) campaign. The PSA focuses on friends discussing the BOI requirements in a coffee shop.”
Read here for further details:
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