MO Banker Tells Lawmakers Beneficial Ownership Registry Must be Fully Accessible to Banks

During testimony at a House subcommittee hearing Wednesday, a Missouri banker said the Financial Crimes Enforcement Network’s implementation of the Anti-Money Laundering Act of 2020 must be done in line with congressional intent.

Pete Selenke, vice president and AML/BSA officer for Central Bank in Jefferson City, expressed concerns about FinCEN’s beneficial ownership rulemaking to members of the Subcommittee on National Security, Illicit Finance, and International Financial Institutions. The subcommittee is chaired by Congressman Blaine Luetkemeyer, who has criticized FinCen’s rulemaking for deviating “from congressional intent by allowing beneficial owners to withhold identifying information.”

Testifying on behalf of the American Bankers Association, Selenke raised concerns about the database of beneficial ownership registry that FinCEN is required to create pursuant to the Corporate Transparency Act, a key part of AMLA.

“Congress explicitly intended for the beneficial ownership information included in the registry to be accessed by banks, with their customers’ consent, for purposes of complying with the ‘customer due diligence’ requirements under applicable law,” Selenke said. “This directive is broad and clear. However, in the proposed rule FinCEN issued last December, the use restrictions FinCEN placed on this information make this beneficial ownership registry information useless to banks.”

He added that limiting the use of this registry information so severely could cause banks to simply choose not to use this information at all.

“We do not believe this is an outcome Congress or FinCEN intended, and it is certainly not what banks want,” Selenke said.

Selenke also urged the federal government to ramp up efforts to educate the newly regulated public about the forthcoming rules, especially given the significant penalties for noncompliance.

“If our customers do not know about the rule, they will not know they need to comply with it, which means they will be in a position to violate the rule,” Selenke said. “We take care of our customers, and we think of them as the good guys. The last thing we want is to see any rule risk turning good guys into bad guys because they failed to comply with a law they were not aware existed.”

Earlier this year, MBA joined state bankers associations urged FinCEN to withdraw its proposal, calling the proposal “fatally flawed.”

“We are proud to have Pete represent the banking community in expressing our concerns about FinCEN's beneficial ownership rulemaking,” said MBA President and CEO Jackson Hataway. “We thank Congressman Luetkemeyer for his leadership to bring this issue to the forefront of Congress.”