The Financial Crimes Enforcement Network (FinCEN) initially requested on March 16, 2020 that financial institutions continue to meet their compliance requirements, and if they were unable to do so due to the COVID-19 pandemic, that they reach out to FinCEN and their functional regulators. However, on April 3, 2020, FinCEN finally issued relief to financial institutions experiencing challenges meeting certain compliance requirements during the COVID-19 pandemic.
BSA Report Filings
FinCEN and banking regulators like the Office of the Comptroller of the Currency (OCC) recognize there may be reasonable delays in complying with timing requirements for certain Bank Secrecy Act (BSA) report filings. Financial institutions are encouraged to be innovative to meet their BSA/Anti-Money Laundering (AML) compliance obligations. BSA officers nationwide should use this opportunity to identify weak or inefficient compliance processes, and explore how technology and managed services can strengthen their compliance programs.
Currency Transaction Report Filing Obligations
FinCEN is suspending until further notice the implementation of the February 2020 ruling (FIN-2020-R001) on Currency Transaction Report (CTR) filing obligations when reporting transactions involving sole proprietorships and entities operating under a “doing business as” (DBA) name. Financial institutions should continue to report transactions involving sole proprietorships and DBAs under prior practice. However, institutions that have already operationalized changes to comply with the ruling do not have to revert back to prior procedures.
Beneficial Ownership Information Collection Requirements for Existing Customers
Loans to existing customers under the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) will not require re-verification under applicable BSA requirements, unless otherwise indicated by the institution’s risk-based approach to Bank Secrecy Act (BSA) compliance. As a reminder for non-PPP loans, FinCEN’s September 7, 2018 ruling (FIN-2018-R004) grants exceptive relief of its requirement to identify and verify the identity of the beneficial owner(s) when a legal entity customer opens a new account as a result of the following:
- A rollover of a certificate of deposit (CD) (as defined below);
- A renewal, modification, or extension of a loan (e.g., setting a later payoff date) that does not require underwriting review and approval;
- A renewal, modification, or extension of a commercial line of credit or credit card account (e.g., a later payoff date is set) that does not require underwriting review and approval; and
- A renewal of a safe deposit box rental.
To the extent that renewal, modification, restructuring, or extension for existing legal entity customers falls outside the scope of this ruling, FinCEN recognizes that COVID-19 may cause reasonable delays in compliance with beneficial owner verification requirements.
New FinCEN COVID-19 Online Contact Mechanism
FinCEN launched a way for financial institutions to communicate COVID-19-related compliance concerns on its website. Financial institutions are also encouraged to contact their functional regulator(s) or other BSA examining authority if they have compliance concerns due to the pandemic.
While FinCEN provides some relief to financial institutions dealing with COVID-19 challenges and disruptions, there still remains a vast set of complex rules, regulations, and regulatory expectations that must be followed. Firms that take advantage of the relief provided by FinCEN should maintain records that support the reasonableness of its compliance delays and ensure its Board is informed of policy exceptions.
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ACA’s COVID-19 Resources
ACA is actively monitoring the developments related to COVID-19 and producing resources to help your firm address operational challenges created by this pandemic. Visit our COVID-19 Resources page to access all of the resources we've developed that may help you navigate through the restrictions in place to curb the pandemic.