Legal Seminar, Chicago, IL

B. Bank Secrecy Act and Anti-Money Laundering • “Banks” without a federal functional regulator, which would include most state-chartered ITCs, have been exempt from certain provisions of the PATRIOT Act related to AML. • The Financial Crimes Enforcement Network (FinCEN), a part of the Department of the Treasury, has published regulations that would remove such “gap” exemptions and require ITCs to adhere to the same standards as those for banks, including recently adopted beneficial ownership review for persons owning >25% of entity.

• The proposed change to the regulations was adopted by FinCEN in August 2016, but has not been finally approved by its Director or Treasury officials. • It is not clear when such regulations will be finalized, and emails and calls to FinCEN elicited a nice, but firm, email that FinCEN representatives are not permitted to discuss actions that have “not been formally published.”