FinCEN Temporary BO Exemption for Rollovers to Expire August 9, 2018

Next Thursday, August 9, is the day that the temporary beneficial ownership exemption for automatic rollover products is set to expire.   The question is, will FinCEN do anything before next Thursday?

On May 16, 2018, FinCEN provided a ruling (FIN-2018-R002) that provided a 90-day limited exceptive relief to covered financial institutions with respect to certain financial products and services that automatically rollover or renew.  These products typically include certificate of deposits and/or loan accounts. The temporary exemption was retroactive to May 11, 2018, and expires on August 9, 2018.

In their May release, FinCEN stated they believed that further consideration of beneficial ownership requirements for account renewals was needed.  The challenge for most financial institutions, however, is that this relief came in the 13th hour - five days after the new beneficial ownership rules went into effect.  This means that most financial institutions had already established a solution to comply with the prior ruling that essentially required (most) beneficial ownership rules for accounts that automatically rollover.

While many financial institutions are not utilizing the temporary exemption for automatic rollover accounts, BSA Officers should watch for additional guidance from FinCEN within the next week - or possibly five days after August 9, 2018.

The temporary exemption can be found here.  

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