On February 4, NMHC, along with NAA, NAHB, RER and ICSC, submitted a comment letter to the Financial Crimes Enforcement Network (FinCEN), a department within the U.S. Department of Treasury (Treasury), in response to an Advance Notice of Public Rule Making (NPRM). The NPRM is a proposed rule implementing the reporting requirements for beneficial ownership interests as established as part of the Corporate Transparency Act (CTA) contained within the National Defense Authorization Act of 2021.
The CTA requires entities defined as reporting companies to submit beneficial ownership and company applicant information to FinCEN to help prevent and combat money laundering, terrorist financing, tax fraud and other illicit activity. The NPRM is a proposal of what information must be filed with FinCEN that would best accomplish the intent of the statute and be highly useful in protecting U.S. national security, provide critical information to law enforcement, and promote financial transparency and compliance by increasing the transparency of the ownership structure of corporations, limited liability companies (LLCs), limited partnership, and statutory trust (among other) structures. It describes who must file information, what information must be filed, and when the information is to be filed, which is how our comments were organized.
The letter expressed concerns regarding lack of clarity of the proposed rule, confusing directions for users, unclear definitions of key terms and unreasonable reporting timelines. The letter also offered constructive recommendations for each concern expressed.
FinCEN noted in the NPRM that they will issue two more NPRM’s in the coming months as part of the implementation of the CTA that, first, will address use and access of the database they are developing and, second, revamp the existing bank beneficial ownership reporting framework to comply with the framework in this proposed NPRM.
NMHC and NAA will continue to work with FinCEN on the implementation of the CTA and will provide analysis and comments to the future NPRMs.
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