Regulation

FinCEN Tweaks Rule On Reporting Financial Transactions

FinCEN

The Department of the Treasury Financial Crimes Enforcement Network (FinCEN) has issued a new ruling on the reporting of currency transactions for sole proprietorships and legal entities operating under a “Doing Business As” (DBA) name, according to a Monday (Feb. 10) release.

The ruling, which takes effect April 6, replaces two previous rulings: FIN-2006-R003 and FIN-2008-R001. Those rules were based on FinCEN Form 104, which is now obsolete. The rule involves Currency Transaction Report (CTR) regulations.

FinCEN said it issued the ruling to clarify the CTR Form 112 filing obligations “when reporting transactions involving sole proprietorships,” according to the release. “In an effort to both enhance regulatory efficiency and provide complete and accurate CTR data to law enforcement, we are clarifying the requirements of financial institutions reporting on currency transactions involving sole proprietorships and legal entities operating under a ‘doing business as’ (‘DBA’) name when filing the current CTR FinCEN Form 112.”

The definition of a sole proprietorship is a business where one person, who acts in their own capacity, is responsible for the business and its liabilities. It is also consistent with the way the Bank Secrecy Act’s implementing regulations defines a person, and it’s not a separate legal person from an individual owner.

This means that when a CTR FinCEN Form 112 is prepared by a sole proprietorship, “a financial institution should complete a single Part I ‘Person Involved in Transaction’ section with the individual owner’s name in Items 4 through 6, gender in Item 7, and date of birth in Item 17,” the release said.

If the business owner is doing business in their name, then Part 1 should be finished using the owner’s personal information.

If it’s a person operating under a different name (a “doing business as” or DBA name), then that name should appear in the Item 8 Alternate name section, and a different Part 1 section should be finished for every DBA that’s involved.

The release also says that when a CTR is “prepared on a legal entity such as a partnership, incorporated business, or limited liability company, a Part I section should be prepared containing the home office/ headquarters data (address, telephone number, identification number, etc.) of the entity.” Also, when multiple entity locations are involved in an aggregated CTR, there must be a separate Part 1 for each location.

——————————

New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

TRENDING RIGHT NOW