ALTA Applauds Passage of National Defense Authorization Act With Beneficial Ownership Amendment
December 15, 2020
ALTA commended Congress for passing the National Defense Authorization Act (NDAA), which included a beneficial ownership amendment designed to help limit money laundering and other criminal activity. The legislation would require companies and LLCs to file beneficial ownership information with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) at the time the entity is created and update the info yearly.
The NDAA includes a version of the Corporate Transparency Act. Under this provision, companies and LLCs will have to file their beneficial ownership information with FinCEN at the time the entity is created, then update the information annually.
President Donald Trump still plans to veto the act despite both chambers of Congress passing the $740.5 billion spending bill with veto-proof majorities. Trump has until Dec. 23 to decide whether to veto the act or allow the annual measure setting policy for the Department of Defense to become law,
ALTA members asked members of Congress to co-sponsor the bill during the 2019 ALTA Advocacy Summit. Title companies report beneficial ownership information to FinCEN as part of the Geographic Targeting Orders (GTOs). This is the one piece of information that the industry does not have another business reason to collect and has no source to verify the information.
Under the provision, once a beneficial ownership database is up and running, financial institutions with customer due diligence obligations (such as under the GTO rules) will be able to access the FinCEN data with their customers' permission. This could help streamline title companies' reporting burdens and give them more assurance that the information they report under GTOs is accurate. Additionally, once the database is up and running, FinCEN is supposed to reevaluate its reporting requirements to reduce burdens, especially in instances where they are collecting the same information elsewhere.
“A requirement for companies to report their beneficial ownership to a national repository will help law enforcement identify and combat the use of real estate in money laundering without creating new compliance burdens,” said Diane Tomb, chief executive officer of ALTA. “This is integral for efforts to modernize the United States anti-money laundering rules and to help countering the financing of terrorist activity. Financial institutions with customer due diligence obligations will be able to access the FinCEN data with their customers' permission. This could help streamline reporting burdens of title insurance companies and give them more assurance that the information they report under Geographic Targeting Orders is accurate.”
Contact ALTA at 202-296-3671 or [email protected].