Rules for Beneficial Ownership for Businesses
The U.S. Government passed regulations impacting all legal entities opening or maintaining accounts at any financial institution.
New regulatory change beginning January 1, 2024, which may impact your business.
If you qualify as a “Reporting Company” (definitions below), you will be required to report information about beneficial owners, i.e., the individuals who ultimately own or control the company, to the Financial Crimes Enforcement Network (FinCEN). FinCEN is a bureau of the U.S. Department of the Treasury whose mission is to safeguard the financial system from illicit use, combat money laundering, and promote national security.
A “Reporting Company” is defined as:
A) A corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
B) A foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
Reporting companies will be able to report electronically through FinCEN’s website. The system will provide the filer with a confirmation of receipt once a completed report is filed.
Reports will be accepted no earlier than January 1, 2024. If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025, to report Beneficial Ownership Information (BOI). If your company is created or registered in 2024, you must report BOI within 90 days of notice of creation or registration. Any updates or corrections to BOI that you previously filed with FinCEN must be submitted within 90 days.
For more information, review FinCEN’s resources linked below or call the Northwest Member Service Center at 703-709-8900. Additional information is available at the websites below:
FAQs applicable to financial institutions
The Beneficial Ownership regulation is a federal law requiring all financial institutions to identify and verify the identity of the beneficial owners of legal entity customers as well as a controlling person of the legal entity anytime an account is opened or maintained. The regulation is aimed at making financial institutions safer for their customers and protecting the country’s financial system.
Northwest Federal, as well as all other financial institutions in the U.S., will be required to collect beneficial ownership information. The U.S. government implemented the new beneficial ownership regulation to help fight financial crimes. Northwest Federal is doing its part in upholding the new regulation to protect the financial system. Compliance with regulations has always been of utmost importance to Northwest Federal, and the new beneficial ownership regulation will be treated with the same level of importance.
No. All financial institutions are required to comply with the new beneficial ownership regulation and will be collecting this beneficial ownership information from applicable customers.
The U.S. government regulation defines “beneficial ownership” as being made up of two roles: (1) those that have an ownership interest in a legal entity and (2) those that control a legal entity.
For those people who have an ownership interest in the legal entity, Northwest Federal is required to identify and collect personal information on anyone that meets or exceeds the following ownership thresholds:
Beneficial Owners: A natural person having 25 percent or more of the equity interests of a legal entity;
Control Person: A person with significant managerial control or influence over a legal entity customer (e.g., Chief Executive Officer, Chief Financial Officer, Managing Member, General Partner, etc.)
For every legal entity client subject to beneficial ownership, you must identify one control person.
NOTE: It is possible that the control person may also be a beneficial owner.
The change should not impact your existing accounts. However, please be aware that we may reach out for beneficial ownership information to update your account file, ensuring necessary compliance for any future financial requests.
Yes. Regardless of member status, information about the beneficial owners and any person with controlling interest must be provided in order to comply with the regulation.
The Beneficial Ownership form is a legally required form that Northwest Federal must collect from legal entity customers regarding their beneficial owners and the control person. By completing the form, you are attesting that the information provided is accurate to the best of your knowledge.
Northwest Federal will maintain beneficial ownership information in its system of record. We maintain strict privacy policies and procedures. Any client information, including beneficial ownership information, will not be shared.
No. This information will not be used for marketing or prospecting purposes.
No. The Beneficial Ownership regulation only applies to applicable legal entity accounts.
The regulation passed by the U.S. government, effective May 11, 2018 impacts all legal entities opening or maintaining accounts at any financial institution.
Legal entities will need to identify and attest to all ultimate beneficial owner(s) that meet specific requirements as well as a controlling person (e.g., Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President or Treasurer).
Northwest Federal will collect information regarding the ultimate beneficial owner(s) and any person with controlling interest of legal entities whether or not they have a direct relationship with the credit union.