Community banks call for AML relief in next coronavirus aid package

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WASHINGTON — Community banks want Congress to halt "beneficial owner" requirements for small-business customers that seek loans through the coronavirus rescue package that Congress passed last month.

In a letter Tuesday, Independent Community Bankers of America CEO Rebeca Romero Rainey said suspending the rules, which require banks to report an account's true owner to the Financial Crimes Enforcement Network, until Dec. 31 would make it easier for customers to seek Small Business Administration loans through the Paycheck Protection Program.

“This rule suspension will facilitate quick access for both PPP and non-PPP credit,” Rainey wrote to House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Mitch McConnell, R-Ky. “Banks will exercise ongoing due diligence and monitoring to safeguard the PPP from fraud.”

Suspending beneficial ownership rules "will facilitate quick access for both PPP and non-PPP credit,” ICBA CEO Rebeca Romero Rainey wrote to congressional leaders.
Suspending beneficial ownership rules "will facilitate quick access for both PPP and non-PPP credit,” ICBA CEO Rebeca Romero Rainey wrote to congressional leaders.

Paul Merski, group executive vice president for congressional relations and strategy at the ICBA, said beneficial ownership rules — part of broader anti-money-laundering requirements — are keeping banks from taking on new customers for the PPP because banks have to certify new customers’ true owners when then they apply.

“If you’re a new small-business customer … then every owner that owns 20% or more of the company, you have to do all of the Fincen documentation that you certify who these owners are,” Merski said. “And there’s just no time to do that. … Particularly in an emergency situation, it’s really putting [new customers] at a huge disadvantage.”

The banking industry has been engaged in ongoing efforts to ease beneficial owner requirements permanently as part of AML reforms, urging lawmakers to pass legislation that would require companies to report owner information directly to Fincen at incorporation. That would take the burden off of banks.

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AML KYC Coronavirus Community banks Nancy Pelosi Mitch McConnell ICBA Regulatory relief Rebeca Romero Rainey Women in Banking
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