By: Jeremy Clifton, CRCM, CAMS
On April 13, 2020 FinCEN and the US Department of Treasury issued additional guidance to clarify beneficial ownership expectations for financial institutions obtaining new customers via Payroll Protection Program (PPP) loan originations. The guidance is provided through a document titled Paycheck Protection Program Frequently Asked Questions (FAQs). FinCEN has stated it will update this document with any additional BSA-related FAQs involving PPP loans as the need may arise in the future.
The FAQs restate the previous guidance issued on existing customers and provide new guidance on beneficial ownership standards for financial institutions originating PPP loans for new customers.
Specifically per the FAQs: “For new customers, the lender’s collection of the following information from all natural persons with a 20% or greater ownership stake in the applicant business will be deemed to satisfy applicable BSA requirements and FinCEN regulations governing the collection of beneficial ownership information: owner name, title, ownership %, TIN, address, and date of birth. If any ownership interest of 20% or greater in the applicant business belongs to a business or other legal entity, lenders will need to collect appropriate beneficial ownership information for that entity.”
It should be noted the current SBA sample PPP borrower application requires institutions to obtain certain information from all natural persons with a 20% or greater ownership stake in the applicant business and contains fields for the above mentioned information (owner name, title, ownership %, TIN, address); however, it does not contain a field for date of birth. Institutions will be required to implement this “amended” beneficial ownership process at a 20% ownership stake to satisfy standard beneficial ownership requirements for PPP loans originated for new customers. Moreover, procedures should also ensure the financial institution obtains the covered owner’s date of birth through the information gathering process to ensure future compliance.
View the full FAQ document which addresses beneficial ownership rules for originating PPP loans for new and existing customers at the following link:
https://www.fincen.gov/sites/default/files/2020-04/Paycheck_Protection_Program_FAQs.pdf
On April 13, 2020 FinCEN and the US Department of Treasury issued additional guidance to clarify beneficial ownership expectations for financial institutions obtaining new customers via Payroll Protection Program (PPP) loan originations. The guidance is provided through a document titled Paycheck Protection Program Frequently Asked Questions (FAQs). FinCEN has stated it will update this document with any additional BSA-related FAQs involving PPP loans as the need may arise in the future.
The FAQs restate the previous guidance issued on existing customers and provide new guidance on beneficial ownership standards for financial institutions originating PPP loans for new customers.
Specifically per the FAQs: “For new customers, the lender’s collection of the following information from all natural persons with a 20% or greater ownership stake in the applicant business will be deemed to satisfy applicable BSA requirements and FinCEN regulations governing the collection of beneficial ownership information: owner name, title, ownership %, TIN, address, and date of birth. If any ownership interest of 20% or greater in the applicant business belongs to a business or other legal entity, lenders will need to collect appropriate beneficial ownership information for that entity.”
It should be noted the current SBA sample PPP borrower application requires institutions to obtain certain information from all natural persons with a 20% or greater ownership stake in the applicant business and contains fields for the above mentioned information (owner name, title, ownership %, TIN, address); however, it does not contain a field for date of birth. Institutions will be required to implement this “amended” beneficial ownership process at a 20% ownership stake to satisfy standard beneficial ownership requirements for PPP loans originated for new customers. Moreover, procedures should also ensure the financial institution obtains the covered owner’s date of birth through the information gathering process to ensure future compliance.
View the full FAQ document which addresses beneficial ownership rules for originating PPP loans for new and existing customers at the following link:
https://www.fincen.gov/sites/default/files/2020-04/Paycheck_Protection_Program_FAQs.pdf
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