It is unlikely that the interim rule will lead to change for the BSA burden for most financial institutions since the requirements are critical in deterring and reporting money laundering, terror financing, and other illicit activity. In fact, the Financial Action Task Force (FATF), which is the global standard-setting agency for combating money laundering and terror financing, issued a statement on April 1 addressing COVID-19 related financial crime. The FATF advises that criminals are taking advantage of the COVID-19 pandemic and that institutions must remain alert to illicit financial risks.
FinCEN issued a release on April 3, 2020 reminding financial institutions that compliance with the BSA remains crucial to protecting our national security. It also outlined its commitment to promoting the success of the CARES Act, including the need to facilitate expeditious disbursal of funds. FinCEN said in the release that eligible federally insured depository institutions and federally insured credit unions would not be required to re-verify existing customers under applicable BSA requirements for PPP loans, “unless otherwise indicated by the institution’s risk-based approach to BSA compliance.”
The SBA and Treasury Department have also reiterated that guidance in their PPP FAQs. “Furthermore, if federally insured depository institutions and federally insured credit unions eligible to participate in the PPP program have not yet collected beneficial ownership information on existing customers, such institutions do not need to collect and verify beneficial ownership information for those customers applying for new PPP loans, unless otherwise indicated by the lender’s risk-based approach to BSA compliance,” they said.