Letter to OMB on Beneficial Ownership Requirements for Legal Entity Customers

Dear Director Young:

The American Bankers Association (ABA) appreciates the opportunity to comment on the Paperwork Reduction Act (PRA) requests for comment published by the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). FinCEN seeks renewal, without change, of the existing information collection requirements relating four separate information collections, including FinCEN's beneficial ownership requirements for legal entity customers. In particular, FinCEN seeks reapproval of Appendix A, the Certification Regarding Beneficial Owners of Legal Entity Customers form published by FinCEN that banks may use to comply with FinCEN's 2016 customer due diligence (CDD) rule.

I. Summary of the Comment

The PRA requires federal agencies to seek approval (or as here, reapproval) from the Office of Management and Budget (OMB) before collecting information from the public. In pursuit of OMB approval, an agency must demonstrate that it has accurately assessed the costs of each information collection, balanced these costs and benefits, considered the need for and utility of each individual paperwork requirement, and minimized the collection burden of the information collection request.

ABA supports the goals of the PRA—we believe that accurately quantifying an information collection burden is an important predicate to an agency's assessment of regulatory burden— as well as FinCEN's work to achieve the goals of the Anti-Money Laundering Act of 2020 and its Corporate Transparency Act. Accordingly, on April 26, 2024, ABA submitted comments to FinCEN regarding FinCEN's massive underestimate of the PRA burden associated with legal entity beneficial ownership certification under the CDD rule, in an effort to help FinCEN understand the current burdens associated with the CDD Rule, a letter attached to this submission.

We were, therefore, disappointed to learn that FinCEN took steps to publish the 30-day PRA notice in the Federal Register prior to the expiration of the 60-day PRA comment deadline, conduct that shows little regard for either the spirit or letter of its obligations under the PRA. Consequently, we urge OMB to condition re-approval of this information collection on FinCEN reassessing and revising this PRA burden estimate upward and engaging in further discussions regarding burdens associated with CDD rule compliance with ABA.

Download the comment letter to read the full text.