Despite Court Ruling, FinCEN Beneficial Ownership Reporting Remains In Effect

What happened: The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) beneficial ownership reporting rule, which took effect Jan. 1, was declared unconstitutional March 1 by a federal district court in Alabama.

Why it matters: The rule requires small and mid-size businesses and some small business parent companies to report specific personal information about each of their beneficial owners. This includes a driver’s license or government issued photo ID, birth date, current mailing address, etc. Any business official that has substantial control over business decisions and operations must report this information to FinCEN or face monetary penalties. The Alabama court’s ruling on this case – which was brought by the National Small Business Association (NSBA) – prohibits NSBA from being forced to comply, but it remains unclear who specifically is exempt.

What’s next: This week ARTBA held a webinar featuring a FinCEN official, Jonathan Dixon, and a presentation by financial regulatory attorney AJ Dhaliwal. Contact Prianka Sharma for the webinar recording.