By Donya Parrish, MCU VP Risk Management

FinCEN’s Beneficial Ownership Information (BOI) rule helps identify the actual people behind corporations and entities, especially as some business structures get more complex. The rule requires credit unions to collect additional information on individuals when an entity opens a deposit account or applies for a loan. That information is then filed at the credit union and accessible by FinCEN or federal agencies upon request.

• Any reference in policy or procedure to “legal entities” should include a corporation, limited liability company, or any other entity that registers with the Secretary of State, but does not include sole proprietorships or unincorporated sports leagues.
• The test for beneficial ownership includes ownership (>25%) or significant responsibility to control, manage, or direct the entity. If someone meets either one of those two qualifications, the credit union needs to collect and verify their name, address, date of birth, and tax ID number. Your credit union’s loan and account staff should be trained to discuss and collect this information on impacted accounts.
• Use a form similar to the one FinCEN produced for collecting beneficial owner information, even though the form does not provide safe harbor. A form might also be provided by your data or forms system when a qualifying account is opened.
• Treat legal entity accounts open prior to May 2018 as exempt from the beneficial ownership rule and additional collection, unless the entity opens a new account or loan after that date or indicates there has been a change in ownership. Additional contact with the entity at any time after the initial collection could trigger a confirmation that the information on the form is still accurate or an update to the form and information might be needed. All updates with the entity or its representatives should be documented in their profile.
• NCUA and other federal regulators released a Fact Sheet on BSA due diligence for charities and non-profit organizations. It is worth a read as it provides some good questions to ask as you work through verifying and risk-rating those entities that have account services with your credit union.

The previously announced January 2025 reporting of beneficial ownership information directly to FinCEN was eliminated in March 2025 for U.S. companies and persons. The requirement (described above) to report to credit unions is unchanged and will continue at the credit union level for the foreseeable future.