Removing Barriers Blog

CU Concerns Shared with Committee for Hearing on Illicit Finance & Beneficial Ownership
Posted May 21, 2019 by CUNA Advocacy

Earlier today, CUNA wrote to Chairman Crapo and Ranking Member Brown prior to the Senate Banking Committee’s hearing entitled, “Combating Illicit Financing by Anonymous Shell Companies Through the Collection of Beneficial Ownership Information.”  The Chairman submitted CUNA's letter into the record for the hearing.

The letter wrote of CUNA and credit union support for reasonable protections, including those under the Bank Secrecy Act (BSA), aimed at reducing financial crimes.

“Credit unions take BSA/AML compliance seriously and dedicate significant resources to it. However, when credit unions are spending their limited resources disproportionately on compliance, this means they are spending fewer resources on innovating and providing safe and affordable products and services.”

CUNA supports efforts to track money laundering and terrorist financing, but also believe it is important to strike the right balance between the costs to financial institutions, like credit unions, and the benefits to the federal government from the BSA/AML, and Office of Foreign Assets Control (OFAC) regulations. As such, CUNA supports legislative and regulatory changes to address the redundancies, unnecessary burdens, and opportunities for efficiencies within the BSA/AML statutory framework and support changes to:

1. Minimize the duplication of the same or similar information;

2. Provide additional flexibility based on the reporting institution type or level of transactions;

3. Curtail the continually enhanced CDD requirements;

4. Increase the threshold requiring Currency Transaction Reports (CTRs);

5. Reduce and simplify the reporting requirements of Suspicious Activity Reports (SARs) that have limited usefulness to law enforcement; and

6. Allow for greater regulatory and examination consistency among regulators, including the National Credit Union Administration (NCUA) and state credit union regulators, in order to help with interpretations of BSA requirements and guidance and to minimize regulatory overlap. 

CUNA also urged the Committee to continue encouraging FinCEN to work with the industry on compliance issues as they arise. Doing so will continue to allow the financial industry to meet the compliance requirements of the rule while at the same time aiding FinCEN in achieving the objectives of the rule, including in the area of anonymous shell companies.

On behalf of America’s credit unions and their 115 million members, CUNA will continue to encourage a regulatory regime that recognizes the time and effort that goes into good faith compliance with laws and does not unduly punish financial institutions for unintentional technical or minor errors. The seemingly never-ending stream of regulatory expectations for credit unions, often with small and stretched staffs, must be considered in agency examinations and when laws and requirements are enacted.