WASHINGTON — The Treasury Department took a step forward Wednesday toward finalizing a highly anticipated customer due diligence rule that is expected to cost financial institutions and their customers between $700 million and $1.5 billion over the next 10 years.

Treasury first issued a proposal in August 2014 that would require financial institutions to identify a client company's owner or controller in an effort to prevent the use of shell companies to launder money. But the department has been silent on when it plans to finalize the rule, leaving bankers anxious about when the new requirements will go into effect.

Treasury's Financial Crimes Enforcement Network released a regulatory impact assessment on the plan Wednesday, however, which is a requirement before the rule can be finalized if it is expected to cost the industry more than $100 million annually.

"The proposed customer due diligence rule will play an important role in strengthening the responsibilities of financial institutions to know the identities of the actual people who control and profit from the companies they support," Fincen Deputy Director Jamal El-Hindi said in a press release.

He said the cost-benefit analysis was clear.

"Curbing only 0.45% of the estimated annual $300 billion annual flow of real illicit proceeds — in each of the 10 years covered by the RIA — would justify the costs of the rule and further protect the U.S. financial system from abuse and terrorist financing."

The impact assessment is open for comment until Jan. 25, but a senior Fincen official said finalizing the rule is a top priority and the agency is pushing forward as quickly as possible.

They also added that the impact assessment was conservative in assuming higher costs and lower benefits and still came out with a relatively low bar to meet the breakeven equation.

In determining the economic impact of implementing the rule, Fincen estimated that it would take an additional 15 to 30 minutes during an account opening to meet the customer due diligence requirement.

Implementing the rule would also require financial institutions to update their Information Technology systems which it estimated at $10 billion for purposes of the analysis.

However, Fincen said it was unable to get an actual "industry-level estimate," noting that the costs would vary depending on whether the institution used an outside vendor — and the terms of the contract — or had its own in-house system.

The impact assessment also noted that one large bank estimated it would cost roughly $20 million to update its system, while a midsize bank guessed it would cost between $3 million and $5 million and a small credit union pegged the cost between $50,000 and $70,000.

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