A bill that would, among other things, provide financial institutions an 18-month safe harbor for good faith compliance with the recent Financial Crimes Enforcement Network (FinCEN) customer due diligence (CDD) rule was pulled from the agenda of a mark-up held Thursday by the House Financial Services Committee.
The bill is expected to be modified before proceeding to mark-up.
As anticipated in a committee memorandum, a bill was introduced June 12 by Reps. Pearce (R-N.M.) and Blaine Luetkemeyer (R-Mo.) titled the Counter Terrorism and Illicit Finance Act (H.R. 6068). That measure would, in addition to providing the CDD safe harbor, increase thresholds for certain currency transaction reports (CTRs) and suspicious activity reports (SARs); review and streamline certain financial reporting requirements; improve information sharing within financial institutions; establish a no-action letter policy specific to BSA/AML laws and regulations; establish and make public priorities for anti-money laundering/combatting the financing of terrorism (AML/CFT); encourage technological innovation in AML programs; assess the usefulness of BSA reporting to law enforcement; and require two studies.
The proposed 18-month CDD rule safe harbor says “no person shall be liable for any violation” of the rule as long as that person has made a good faith effort to comply. The safe harbor period would date from May 11, 2018, the effective date of the final rule.
A study on the CDD rule’s beneficial ownership requirement is also required under the bill. The Government Accountability Office (GAO) would be required to complete and report results, within two years, of a study addressing the effectiveness of and burden associated with the collection of beneficial ownership information collected under the rule.
Acknowledging the bill’s removal from Thursday’s mark-up, panel Ranking Member Maxine Waters (D-Calif.), in a statement, said she hoped the reworked bill will be strengthened and address the issue of beneficial ownership as well as “the problem of anonymous shell companies.”
Another study required under the original bill text would address BSA/AML-related costs to the private sector, effectiveness of the current AML and counter terrorist financing framework, private-sector benefits and costs related to BSA/AML compliance, and the impact of financial institutions’ BSA/AML compliance on consumers’ and customers’ access to services.
In all, four bills were marked up and reported out by the committee Thursday: the Building Up Independent Lives and Dreams Act (H.R. 5953), the Fight Illicit Networks and Detect Trafficking Act (H.R. 6069), the Options Markets Stability Act (H.R. 5749), and the Streamlining Communications for Investors Act (H.R. 6035).