The Financial Crimes Enforcement Network ("FinCEN") extended previously granted relief that temporarily exempts certain products and services from the Beneficial Ownership Rule. To qualify for the relief, a product or service must (i) have been established before the Rule took effect on May 11, 2018, and (ii) automatically roll over or renew (i.e., certificates of deposit or loan accounts). The relief, which was set to expire on August 8, 2018, has been extended through September 8, 2018.
As previously covered, the Beneficial Ownership Rule requires certain financial institutions to collect beneficial ownership information for most legal entities that open new accounts. This requirement extends to existing customers. While rollovers may be classified as new accounts, financial institutions generally do not treat them as such.
Commentary / Christian Larson
FinCEN's extension of temporary relief, first for 90 days and now for an additional 30 days, highlights the difficulty of implementing new regulations. It is largely clear how the Beneficial Ownership Rule applies in the context of a standard checking or brokerage account. Unexpected complexities arise when regulatory definitions come up against lesser-known, but longstanding, practices.
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