Davis Polk partner Dan Stipano was quoted in ABA Banking Journal on the Corporate Transparency Act (CTA), which requires a range of entities to file reports with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) to identify who owns and controls the company. Currently, only part of the CTA has been implemented.

Dan noted that the third and final CTA implementation step will have the greatest impact on banks. When it is proposed, it will comprise amendments aiming to conform the existing customer due diligence (CDD) rule to new beneficial ownership requirements. This will be a challenging task given that the CTA directs FinCEN to rescind and replace most of the existing CDD rule’s beneficial ownership requirements.

“We’re probably in the third of nine innings for CTA, although the contours of where FinCEN is heading are becoming clearer,” Dan explained. He added that the CDD rule took six years from the start of deliberations to its effective date, and completion of the CTA’s amendments may be another three to five years away.

“FinCEN’s slow and confusing start to AMLA raises bankers’ concerns,” ABA Banking Journal (October 19, 2023)

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