Following on from its 16 March guidance, the Financial Crimes Enforcement Network (FinCen) has released more detailed guidance for banks to comply with Bank Secrecy Act (BSA) requirements during the COVID-19 pandemic and in light of the US CARES Act.
Expectations and Reporting
FinCen expects banks to continue to diligently adhere to their obligations to apply a risk-based approach to prevent and detect financial crime, but recognises there may be some “challenges” to meet requirements such as filing. Therefore FinCen suspended implementation of CTR filing obligations involving sole proprietorships and entities “doing business as” (under the February 2020 ruling). FinCen will “continue outreach” and issue additional information “as appropriate” on other reporting requirements. FinCen encourages financial institutions to consider “innovative” approaches to meet their compliance obligations, but to remain alert to illicit financial activity and fraud.
CDD for CARES Act claims
For existing customers, there is no reverification required for customers to receive Paycheck Protection Program (PPP) loans. For non-PPP loans, FinCen recognises that BSA requirements may lead to delays and points financial institutions to its 7 September 2018 Ruling which offers certain relief from beneficial ownership requirements.
FinCen also announced the creation of a specific online contact for COVID-19 related questions.
Although the guidance is some help for financial institutions, it underscores the regulator’s expectation that banks continue to work hard to fight financial crime, and leaves open questions on how the regulator will approach any non-compliance.
FinCEN recognizes financial institutions face challenges related to the COVID-19 pandemic. In addition, FinCEN is committed to promoting the success of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including the need to facilitate expeditious disbursal of CARES Act funds. Accordingly, FinCEN will issue further information, as appropriate, as the CARES Act is implemented and questions arise.