New rulemaking could mean more administrative burden for the industry. NAA is taking action.
The Financial Crimes Enforcement Network (FinCEN), charged with safeguarding the U.S. financial system from illicit use, announced three distinct regulatory actions in December. The actions, which focus on increasing business transparency and reforming existing anti-money laundering (AML) processes, come amidst claims from Treasury Secretary Janet Yellen that the U.S. is “the best place” to hide and launder illicit cash.
- On December 6, FinCEN announced an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on a potential rule to address money laundering and illicit activity risks in all-cash real estate transactions.
- On December 7, FinCEN issued a Notice of Proposed Rulemaking (NPRM) to implement the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA).
- On December 14, FinCEN published a Request for Information (RFI) seeking comments on ways to streamline, modernize and update the AML regime of the United States.
Of greatest significance are the NPRM and the reporting requirements it will place on most businesses. Enacted on January 1, 2021, the CTA represents years of debate over how to implement transparency requirements for businesses operating in the U.S., otherwise referred to as reporting companies.
The result is a proposed rule that will require reporting companies to disclose identifying information on two categories of individuals: (1) the beneficial owners of the reporting company; and (2) individuals who have filed an application to form the reporting company on behalf of the beneficial owners. Under the proposed rule, reporting companies formed before regulations are implemented would have up to one year to submit beneficial ownership information, whereas reporting companies formed after implementation would submit up to 14 days after formation.
Recognizing the new administrative burden placed on virtually all owners and operators of rental housing, the National Apartment Association (NAA) will submit comments on behalf of the industry. The comment period for the NPRM will remain open until February 7, 2022.
For more information on FinCEN’s beneficial ownership disclosure rule, please reach out to Sam Gilboard, NAA’s Senior Manager of Public Policy.