Corporate Transparency Act Imposes New Federal Reporting Requirements on Most U.S. Companies

By Banking and Financial Services, Business

Beginning in January 2024, most privately-owned companies formed or registered in the United States must start reporting the names of their “Beneficial Owners” to the U.S. Treasury Department. This reporting requirement is imposed by the Corporate Transparency Act (“CTA”), a 2020 federal law, and the Treasury Department expects it to apply to more than 32 million U.S. companies in its first year.[1] The CTA is part of the federal government’s fight against money laundering, which often entails the rapid formation of U.S. shell companies and the transfer of illegal funds between them. Read More

F.D.I.C. Requests that Banks Report Their Cryptocurrency-Related Activities

By Banking and Financial Services, Blockchain & Digital Assets, Intellectual Property, Software & Startups

The Federal Deposit Insurance Corporation (F.D.I.C.) has requested that all banks engaging in cryptocurrency-related activities notify the agency of those activities. The request came in the form of an April 7, 2022 letter, FIL-16-2022, to F.D.I.C.-supervised banks. In that letter, the F.D.I.C. summarizes its concerns regarding banks’ participation in cryptocurrency-related activities. Those concerns include the potentials for consumer confusion, risks to banks’ information technology and cybersecurity systems and money laundering. The F.D.I.C. also wrote that certain inherent characteristics of cryptocurrencies, including practical challenges with identifying digital assets’ ownership, raise unique questions about banks’ ability to ensure safety and soundness. Read More

The Corporate Transparency Act: An Overview for Financial Institutions

By Banking and Financial Services, Business

This article surveys the implications of a new federal statute, the Corporate Transparency Act (“CTA”), for financial institutions and their business customers. The CTA will soon require most private companies in the United States to report the names of their beneficial owners to the Financial Crimes Enforcement Network (“FinCEN”), a division of the U.S. Treasury Department. This new structure will supplement the reporting that banks and other financial institutions currently do under FinCEN’s Customer Due Diligence Rule (“CDD Rule”). Read More