We are committed to informing our clients about regulatory developments that may impact their business. As you may know, the Corporate Transparency Act (the “CTA”), effective as of January 1, 2024, is designed to combat money laundering and requires some entities to report Beneficial Ownership Information (“BOI”) to Financial Crimes Enforcement Network (“FinCEN”) under FinCEN’s final regulations issued on September 29, 2022 (the “Final Rule”), unless an exception applies. The CTA regulation is at 31 C.F.R. § 1010.380. Entities formed during this calendar year, 2024, are already subject to CTA reporting requirements, however, non-exempt entities in existence before January 1, 2024 must file their initial BOI reports before January 1, 2025 so we are making our bank clients aware of certain nuances to the statute that may impact their business and reporting obligations.

While the Final Rule exempts depository institution holding companies (defined as a (i) “bank holding company” as defined in Section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841) or (ii) “savings and loan holding company” as defined in section 10(a) of the Home Owners’ Loan Act (12 U.S.C. 1467a(a))), banks (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813), section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)) or section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a))), and wholly-owned subsidiaries of the same from reporting requirements under the CTA, a bank or depository institution may have reporting obligations for subsidiaries in its corporate structure if any such subsidiary is less than 100% owned (directly or indirectly) by a bank, depository institution or other BOI exempt entity. If this describes any entity in your corporate structure, or if you have any CTA-related questions, we urge you to contact us before the January 1, 2025 reporting deadline.