FinCEN Corrects Beneficial Ownership Form

Some additions will likely require adjustments in the implementation plans of financial institutions and third-party service providers.

10/10/17

FinCEN has published [82 FR 45182] corrections to the Certification Form in Appendix A to 31 CFR 1010.230 (Beneficial ownership requirements for legal entity customers). FinCEN indicated that all the changes were technical corrections. The corrections were described as follows in the Federal Register document:

“As revised, appendix A (Certification Form) is identical to the original version except for the following: In the first sentence in Part I under the heading “What information do I have to provide?”, the term “foreign persons” is changed to “non-U.S. persons”; and in Part II: The heading of Section II b. is changed to “b. Name, Type, and Address of Legal Entity for Which the Account is Being Opened:”; and in the headings of the last column in the Tables in Section II c and Section II d, the term “Foreign Persons” is changed to “Non-U.S. Persons” and the term “Social Security Number” is added after the term “persons”; and in footnote 1, the term “Foreign Persons” is changed to “Non-U.S. Persons” and “a Social Security Number,” is inserted after the word “provide.”

A quick analysis of the changes suggests that the addition of the “type” of legal entity business (corporation, LLC, etc.) as a required piece of information and of “Social Security number” as an acceptable identifying number for non-U.S. persons will require adjustments in the implementation plans of financial institutions and third-party service providers.

Source:  FinCEN

Question of the Week

If a member is a covered borrower at the time he/she opens a credit card, but later ceases to serve on active duty, is his/her credit card account still covered by the MLA?

No, once the member is no longer on active duty, they are no longer considered a covered borrower under the MLA. The regulation provides us with examples of this:

(2) Examples—(i) Covered borrower. Consumer A is a member of the armed forces but not serving on active duty, and holds an account for closed-end credit with a financial institution. After establishing the closed-end credit account, Consumer A is ordered to serve on active duty, thereby becoming a covered borrower, and soon thereafter separately establishes an open-end line of credit for personal purposes (which is not subject to any exception or temporary exemption) with the financial institution. This part applies to the open-end line of credit, but not to the closed-end credit account.

(ii) Not a covered borrower. Same facts as described in paragraph (a)(2)(i) of this section. One year after establishing the open-end line of credit, Consumer A ceases to serve on active duty. This part never did apply to the closed-end credit account, and because Consumer A no longer is a covered borrower, this part no longer applies to the open-end line of credit.

Resources

32 CFR 232.2(a)(2)

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