Agency Information Collection Activities; Proposed Renewal; Comment Request; Renewal Without Change of the Beneficial Ownership Requirements for Legal Entity Customers, 14148-14149 [2024-03965]
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14148
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Notices
this information collection, (88 FR
86445). No comments were received.
Comments continue to be invited on:
(a) Whether the collection of
information is necessary for the proper
performance of the functions of the
OCC, including whether the information
has practical utility;
(b) The accuracy of the OCC’s
estimate of the burden of the collection
of information;
(c) Ways to enhance the quality,
utility, and clarity of the information to
be collected;
(d) Ways to minimize the burden of
the collection on respondents, including
through the use of automated collection
techniques or other forms of information
technology; and
(e) Estimates of capital or start-up
costs and costs of operation,
maintenance, and purchase of services
to provide information.
Theodore J. Dowd,
Deputy Chief Counsel, Office of the
Comptroller of the Currency.
[FR Doc. 2024–03816 Filed 2–23–24; 8:45 am]
BILLING CODE 4810–33–P
DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Agency Information Collection
Activities; Proposed Renewal;
Comment Request; Renewal Without
Change of the Beneficial Ownership
Requirements for Legal Entity
Customers
Financial Crimes Enforcement
Network (FinCEN), Treasury.
ACTION: Notice and request for
comments.
AGENCY:
As part of its continuing effort
to reduce paperwork and respondent
burden, FinCEN invites comment on a
renewal, without change, of existing
information collection requirements
related to beneficial ownership
requirements for legal entity customers.
Under Bank Secrecy Act regulations,
covered financial institutions are
required to collect, and to maintain
records of, the information used to
identify and verify the identity of each
beneficial owner of their legal entity
customers, subject to certain exclusions
and exemptions. This request for
comment is made pursuant to the
Paperwork Reduction Act of 1995
(PRA).
khammond on DSKJM1Z7X2PROD with NOTICES
SUMMARY:
Written comments are welcome
and must be received on or before April
26, 2024.
DATES:
VerDate Sep<11>2014
16:23 Feb 23, 2024
Jkt 262001
Comments may be
submitted by any of the following
methods:
• Federal E-rulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
Refer to Docket Number FINCEN–2024–
0008 and the specific Office of
Management and Budget (OMB) control
number 1506–0070.
• Mail: Policy Division, Financial
Crimes Enforcement Network, P.O. Box
39, Vienna, VA 22183. Refer to Docket
Number FINCEN–2024–0008 and OMB
control number 1506–0070.
Please submit comments by one
method only. Comments will be
reviewed consistent with the PRA and
applicable OMB regulations and
guidance. All comments submitted in
response to this notice will become a
matter of public record. Therefore, you
should submit only information that
you wish to make publicly available.
FOR FURTHER INFORMATION CONTACT:
FinCEN’s Regulatory Support Section at
1–800–767–2825 or electronically at
frc@fincen.gov.
SUPPLEMENTARY INFORMATION:
ADDRESSES:
I. Statutory and Regulatory Provisions
The legislative framework generally
referred to as the Bank Secrecy Act
(BSA) consists of the Currency and
Foreign Transactions Reporting Act of
1970, as amended by the Uniting and
Strengthening America by Providing
Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001
(USA PATRIOT Act) 1 and other
legislation, including the Anti-Money
Laundering Act of 2020 (AML Act).2
The BSA is codified at 12 U.S.C. 1829b
and 1951–1960 and 31 U.S.C. 5311–
5314 and 5316–5336, and notes thereto,
with implementing regulations at 31
CFR Chapter X.
The BSA authorizes the Secretary of
the Treasury (Secretary) to, inter alia,
require financial institutions to keep
records and file reports that are
determined to have a high degree of
usefulness in criminal, tax, or regulatory
matters, risk assessments or
proceedings, or in the conduct of
intelligence or counter-intelligence
activities to protect against terrorism,
and to implement anti-money
laundering (AML) programs and
compliance procedures.3 The authority
1 USA
PATRIOT Act, Public Law 107–56.
AML Act was enacted as Division F,
sections 6001–6511, of the William M. (Mac)
Thornberry National Defense Authorization Act for
Fiscal Year 2021, Public Law 116–283, 134 Stat.
3388 (NDAA).
3 Section 358 of the USA PATRIOT Act expanded
the purpose of the BSA by including a reference to
reports and records ‘‘that have a high degree of
2 The
PO 00000
Frm 00109
Fmt 4703
Sfmt 4703
of the Secretary to administer the BSA
has been delegated to the Director of
FinCEN.4
Subject to certain exclusions and
exemptions, 31 CFR 1010.230 requires
covered financial institutions 5 to
establish and maintain written
procedures that are reasonably designed
to identify and verify beneficial owners
of new accounts opened by legal entity
customers and to include such
procedures in their AML programs.
Covered financial institutions may
obtain the required identifying
information by either obtaining a
prescribed certification form from the
individual opening the account on
behalf of the legal entity customer, or by
obtaining from the individual the
information required by the form by
another means, provided the individual
certifies to the best of the individual’s
knowledge the accuracy of the
information. Covered financial
institutions must verify the identity of
each beneficial owner identified
according to risk-based procedures and
may rely on the information supplied by
the legal entity customer regarding the
identity of its beneficial owner or
owners, provided that it has no
knowledge of facts that would
reasonably call into question the
reliability of such information.
Covered financial institutions must
also maintain a record of the identifying
information obtained, and a description
of any document relied on for
verification, including a description of
any non-documentary methods and
results of any measures undertaken, and
the resolutions of substantive
discrepancies. Covered financial
institutions must retain records used to
identify each beneficial owner for five
years after the date the account is closed
and must also retain records used to
verify the identity of each beneficial
owner for five years after the record is
made.
As required by section 6403(d) of the
Corporate Transparency Act (CTA),
which was enacted as part of the AML
Act, FinCEN intends to revise the
requirements of 31 CFR 1010.230 to
bring them into conformance with the
usefulness in intelligence or counterintelligence
activities to protect against international terrorism.’’
See 12 U.S.C. 1829b(a). Section 6101 of the AML
Act further expanded the purpose of the BSA to
cover such matters as preventing money laundering,
tracking illicit funds, assessing risk, and
establishing appropriate frameworks for
information sharing. See 31 U.S.C. 5311.
4 Treasury Order 180–01 (Jan. 14, 2020).
5 Covered financial institutions include certain
banks, brokers or dealers in securities, mutual
funds, futures commission merchants, and
introducing brokers in commodities. See 31 CFR
1010.230(f), 1010.605(e)(1).
E:\FR\FM\26FEN1.SGM
26FEN1
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Notices
CTA and address other considerations
that FinCEN is required to take into
account.6 As part of the revisions to 31
CFR 1010.230, FinCEN intends to
further assess the PRA burden of these
requirements.
II. Paperwork Reduction Act of 1995 7
Title: Beneficial Ownership
Requirements for Legal Entity
Customers (31 CFR 1010.230).
OMB Control Number: 1506–0070.
Form Number: Appendix A to
§ 1010.230—Certification Regarding
Beneficial Owners of Legal Entity
Customers.
Abstract: FinCEN is issuing this
notice to renew the OMB control
number for the beneficial ownership
requirements for legal entity customers
regulations contained in 31 CFR
1010.230.
Affected Public: Business and other
for-profit institutions and non-profit
institutions.
Type of Review: Renewal without
change of a currently approved
information collection.
Frequency: As required.
Estimated Number of Respondents:
15,221 covered financial institutions.8
RESPONDENT COVERED FINANCIAL
INSTITUTIONS BY CATEGORY
Number of
entities
Financial institution type
Banks ....................................................
Brokers or dealers in securities ............
Mutual funds ..........................................
Futures commission merchants ............
Introducing brokers in commodities ......
Total ...............................................
9 9,250
10 3,477
11 1,495
12 62
13 937
15,221
Estimated Recordkeeping Burden per
Response:
6 The
CTA is Title LXIV of the NDAA.
Reduction Act of 1995, Public Law
104–13, 44 U.S.C. 3506(c)(2)(A).
8 FinCEN’s estimate accounts for all covered U.S.
financial institutions. There are approximately
15,221 covered financial institutions.
9 Bank data is as of December 14, 2023, from
Federal Deposit Insurance Corporation (FDIC)
BankFind. See FDIC, BankFind, available at https://
banks.data.fdic.gov/bankfind-suite/bankfind. Credit
union data is as of September 30, 2023, from the
National Credit Union Administration (NCUA)
Quarterly Data Summary Reports. See NCUA,
Quarterly Data Summary Reports, available at
https://ncua.gov/analysis/credit-union-corporatecall-report-data/quarterly-data-summary-reports.
10 According to the Securities and Exchange
Commission (SEC), there are 3,477 broker-dealers in
securities as of December 2023. See SEC, Data,
Company Information About Active Broker-Dealers,
available at https://www.sec.gov/help/
foiadocsbdfoia.
11 According to the SEC, as of the third quarter
of 2023, there are 1,495 open-end registered
investment companies that report on Form N–CEN.
SEC, Data, Form N–CEN Data Sets, available at
https://www.sec.gov/dera/data/form-ncen-data-sets.
khammond on DSKJM1Z7X2PROD with NOTICES
7 Paperwork
VerDate Sep<11>2014
16:23 Feb 23, 2024
Jkt 262001
a. Update and maintain beneficial
ownership identification procedures: 20
minutes.14
b. Customer identification,
verification, and review and
recordkeeping of the beneficial
ownership information: 80 minutes. A
range of 40 to 120 minutes per legal
entity customer (an average of 80
minutes per legal entity customer).15
Estimated Total Annual Responses:
5,723,096.16
Estimated Total Annual
Recordkeeping Burden: 7,615,574
hours.17
12 According to the Commodity Futures Trading
Commission (CFTC), there are 62 futures
commission merchants as of October 31, 2023. See
CFTC, Financial Data for FCMs, available at https://
www.cftc.gov/MarketReports/financialfcmdata/
index.htm.
13 According to National Futures Association,
there are 937 introducing brokers in commodities
as of November 30, 2023.
14 See FinCEN, Customer Due Diligence
Requirements for Financial Institutions Final Rule,
81 FR 29398 (May 11, 2016). The final rule
recognized a burden of 56 hours to develop the
initial procedures (40 hours for small entities).
Once procedures are developed, an annual burden
of 20 minutes is recognized for revisions to and
maintenance of such procedures. Covered financial
institutions were required to comply with this rule
by May 11, 2018, so no burden hours are included
in this analysis for the initial development of
procedure.
15 See FinCEN, Agency Information Collection
Activities; Proposed Renewal; Comment Request;
Renewal Without Change of the Beneficial
Ownership Requirements for Legal Entity
Customers, 84 FR 72137 (Dec. 30, 2019). On
December 30, 2019, FinCEN published a notice to
renew the Beneficial Ownership Requirements for
Legal Entity Customers (the 2019 Notice). In
response to the 2019 Notice, a public policy,
research and advocacy group, whose membership
includes a broad range of U.S. and U.S.-based
banks, provided a comment noting that the estimate
for customer identification, verification, and review
and recordkeeping of beneficial ownership
information should be increased to a range of 40 to
120 minutes. Because of its broad membership of
banks impacted by the regulations, FinCEN chose
to take the average of the range of 40 to 120 minutes
to estimate a new burden of 80 minutes per new
account opened by a legal entity customer. When
the OMB control number was renewed in 2020, that
80 minutes estimate was incorporated. For the
rationale for the increase in the burden estimate to
80 minutes per new account opened by a legal
entity customer, see Office of Management and
Budget, Supporting Statement for OMB Control
Number 1506–0070, available at https://
www.reginfo.gov/public/do/PRAView
Document?ref_nbr=202003-1506-001.
16 See FinCEN, Customer Due Diligence
Requirements for Financial Institutions Final Rule,
81 FR 29398 (May 11, 2016). Based on research
conducted as part of the final rule, it was estimated
that each covered financial institution will open, on
average, 1.5 new legal entity accounts per business
day. There are 250 business days per year. (15,221
covered financial institutions × 1.5 accounts per
day × 250 business days per year = 5,707,875 legal
entity accounts opened per year). 5,723,096
responses (5,707,875 accounts to verify plus 15,221
covered financial institution’s programs to update).
17 5,707,875 new legal entity accounts multiplied
by 80 minutes per account established and divided
by 60 minutes per hour equals 7,610,500 burden
PO 00000
Frm 00110
Fmt 4703
Sfmt 9990
14149
Estimated Total Annual Reporting
and Recordkeeping Cost:
$372,782,347.30 (7,615,574 hours
multiplied by $48.95).18
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid OMB control
number. Records required to be retained
under the BSA must be retained for five
years.
Request for Comments: Comments
submitted in response to this notice will
be summarized and/or included in the
request for OMB approval. All
comments will become a matter of
public record. Comments are invited on:
(a) whether the collection of information
is necessary for the proper performance
of the functions of the agency, including
whether the information shall have
practical utility; (b) the accuracy of the
agency’s estimate of the burden of the
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be collected; (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology;
and (e) estimates of capital or start-up
costs and costs of operation,
maintenance, and purchase of services
to provide information.
Jimmy L. Kirby, Jr.,
Deputy Director, Financial Crimes
Enforcement Network.
[FR Doc. 2024–03965 Filed 2–23–24; 8:45 am]
BILLING CODE 4810–02–P
hours to identify and verify beneficial owners of
new legal entity accounts per year. 20 minutes to
update and maintain beneficial ownership
identification and verification procedures within a
covered financial institution’s AML program
multiplied by 15,221 covered financial institutions
and divided by 60 minutes equals 5,074 burden
hours annually. The total annual burden hours
estimate for this information collection is
(7,610,500 + 5,074) 7,615,574 hours.
18 The average hourly wage rate is calculated from
the May 2022 U.S. Bureau of Labor Statistics (BLS)
median hourly wage for ‘‘13–1041 Compliance
Officer’’ of $34.47. See BLS, Occupational
Employment and Wages Statistics (May 2022),
available at https://www.bls.gov/oes/tables.htm.
The ratio between benefits and wages for private
industry workers is $12.19 (hourly benefits)/$29.34
(hourly wages) = 0.42, as of September 2023. The
benefit factor is 1 plus the benefit/wages ratio, or
1.42. See BLS, Employee Costs for Employee
Compensation (Sept. 2023), available at https://
www.bls.gov/ecec/home.htm#:∼:text=Employer
%20costs%20for%20private%20industry,percent
%20of%20total%20compensation%20costs. The
fully-loaded wage rate is $48.95 ($34.47 multiplied
by 1.42).
E:\FR\FM\26FEN1.SGM
26FEN1
Agencies
[Federal Register Volume 89, Number 38 (Monday, February 26, 2024)]
[Notices]
[Pages 14148-14149]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03965]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Agency Information Collection Activities; Proposed Renewal;
Comment Request; Renewal Without Change of the Beneficial Ownership
Requirements for Legal Entity Customers
AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.
ACTION: Notice and request for comments.
-----------------------------------------------------------------------
SUMMARY: As part of its continuing effort to reduce paperwork and
respondent burden, FinCEN invites comment on a renewal, without change,
of existing information collection requirements related to beneficial
ownership requirements for legal entity customers. Under Bank Secrecy
Act regulations, covered financial institutions are required to
collect, and to maintain records of, the information used to identify
and verify the identity of each beneficial owner of their legal entity
customers, subject to certain exclusions and exemptions. This request
for comment is made pursuant to the Paperwork Reduction Act of 1995
(PRA).
DATES: Written comments are welcome and must be received on or before
April 26, 2024.
ADDRESSES: Comments may be submitted by any of the following methods:
Federal E-rulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Refer to Docket Number
FINCEN-2024-0008 and the specific Office of Management and Budget (OMB)
control number 1506-0070.
Mail: Policy Division, Financial Crimes Enforcement
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2024-0008 and OMB control number 1506-0070.
Please submit comments by one method only. Comments will be
reviewed consistent with the PRA and applicable OMB regulations and
guidance. All comments submitted in response to this notice will become
a matter of public record. Therefore, you should submit only
information that you wish to make publicly available.
FOR FURTHER INFORMATION CONTACT: FinCEN's Regulatory Support Section at
1-800-767-2825 or electronically at [email protected].
SUPPLEMENTARY INFORMATION:
I. Statutory and Regulatory Provisions
The legislative framework generally referred to as the Bank Secrecy
Act (BSA) consists of the Currency and Foreign Transactions Reporting
Act of 1970, as amended by the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act) \1\ and other legislation,
including the Anti-Money Laundering Act of 2020 (AML Act).\2\ The BSA
is codified at 12 U.S.C. 1829b and 1951-1960 and 31 U.S.C. 5311-5314
and 5316-5336, and notes thereto, with implementing regulations at 31
CFR Chapter X.
---------------------------------------------------------------------------
\1\ USA PATRIOT Act, Public Law 107-56.
\2\ The AML Act was enacted as Division F, sections 6001-6511,
of the William M. (Mac) Thornberry National Defense Authorization
Act for Fiscal Year 2021, Public Law 116-283, 134 Stat. 3388 (NDAA).
---------------------------------------------------------------------------
The BSA authorizes the Secretary of the Treasury (Secretary) to,
inter alia, require financial institutions to keep records and file
reports that are determined to have a high degree of usefulness in
criminal, tax, or regulatory matters, risk assessments or proceedings,
or in the conduct of intelligence or counter-intelligence activities to
protect against terrorism, and to implement anti-money laundering (AML)
programs and compliance procedures.\3\ The authority of the Secretary
to administer the BSA has been delegated to the Director of FinCEN.\4\
---------------------------------------------------------------------------
\3\ Section 358 of the USA PATRIOT Act expanded the purpose of
the BSA by including a reference to reports and records ``that have
a high degree of usefulness in intelligence or counterintelligence
activities to protect against international terrorism.'' See 12
U.S.C. 1829b(a). Section 6101 of the AML Act further expanded the
purpose of the BSA to cover such matters as preventing money
laundering, tracking illicit funds, assessing risk, and establishing
appropriate frameworks for information sharing. See 31 U.S.C. 5311.
\4\ Treasury Order 180-01 (Jan. 14, 2020).
---------------------------------------------------------------------------
Subject to certain exclusions and exemptions, 31 CFR 1010.230
requires covered financial institutions \5\ to establish and maintain
written procedures that are reasonably designed to identify and verify
beneficial owners of new accounts opened by legal entity customers and
to include such procedures in their AML programs. Covered financial
institutions may obtain the required identifying information by either
obtaining a prescribed certification form from the individual opening
the account on behalf of the legal entity customer, or by obtaining
from the individual the information required by the form by another
means, provided the individual certifies to the best of the
individual's knowledge the accuracy of the information. Covered
financial institutions must verify the identity of each beneficial
owner identified according to risk-based procedures and may rely on the
information supplied by the legal entity customer regarding the
identity of its beneficial owner or owners, provided that it has no
knowledge of facts that would reasonably call into question the
reliability of such information.
---------------------------------------------------------------------------
\5\ Covered financial institutions include certain banks,
brokers or dealers in securities, mutual funds, futures commission
merchants, and introducing brokers in commodities. See 31 CFR
1010.230(f), 1010.605(e)(1).
---------------------------------------------------------------------------
Covered financial institutions must also maintain a record of the
identifying information obtained, and a description of any document
relied on for verification, including a description of any non-
documentary methods and results of any measures undertaken, and the
resolutions of substantive discrepancies. Covered financial
institutions must retain records used to identify each beneficial owner
for five years after the date the account is closed and must also
retain records used to verify the identity of each beneficial owner for
five years after the record is made.
As required by section 6403(d) of the Corporate Transparency Act
(CTA), which was enacted as part of the AML Act, FinCEN intends to
revise the requirements of 31 CFR 1010.230 to bring them into
conformance with the
[[Page 14149]]
CTA and address other considerations that FinCEN is required to take
into account.\6\ As part of the revisions to 31 CFR 1010.230, FinCEN
intends to further assess the PRA burden of these requirements.
---------------------------------------------------------------------------
\6\ The CTA is Title LXIV of the NDAA.
---------------------------------------------------------------------------
II. Paperwork Reduction Act of 1995 7
---------------------------------------------------------------------------
\7\ Paperwork Reduction Act of 1995, Public Law 104-13, 44
U.S.C. 3506(c)(2)(A).
---------------------------------------------------------------------------
Title: Beneficial Ownership Requirements for Legal Entity Customers
(31 CFR 1010.230).
OMB Control Number: 1506-0070.
Form Number: Appendix A to Sec. 1010.230--Certification Regarding
Beneficial Owners of Legal Entity Customers.
Abstract: FinCEN is issuing this notice to renew the OMB control
number for the beneficial ownership requirements for legal entity
customers regulations contained in 31 CFR 1010.230.
Affected Public: Business and other for-profit institutions and
non-profit institutions.
Type of Review: Renewal without change of a currently approved
information collection.
Frequency: As required.
Estimated Number of Respondents: 15,221 covered financial
institutions.\8\
---------------------------------------------------------------------------
\8\ FinCEN's estimate accounts for all covered U.S. financial
institutions. There are approximately 15,221 covered financial
institutions.
Respondent Covered Financial Institutions by Category
------------------------------------------------------------------------
Number of
Financial institution type entities
------------------------------------------------------------------------
Banks....................................................... \9\ 9,250
Brokers or dealers in securities............................ \10\ 3,477
Mutual funds................................................ \11\ 1,495
Futures commission merchants................................ \12\ 62
Introducing brokers in commodities.......................... \13\ 937
-----------
Total................................................... 15,221
------------------------------------------------------------------------
Estimated Recordkeeping Burden per Response:
---------------------------------------------------------------------------
\9\ Bank data is as of December 14, 2023, from Federal Deposit
Insurance Corporation (FDIC) BankFind. See FDIC, BankFind, available
at https://banks.data.fdic.gov/bankfind-suite/bankfind. Credit union
data is as of September 30, 2023, from the National Credit Union
Administration (NCUA) Quarterly Data Summary Reports. See NCUA,
Quarterly Data Summary Reports, available at https://ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports.
\10\ According to the Securities and Exchange Commission (SEC),
there are 3,477 broker-dealers in securities as of December 2023.
See SEC, Data, Company Information About Active Broker-Dealers,
available at https://www.sec.gov/help/foiadocsbdfoia.
\11\ According to the SEC, as of the third quarter of 2023,
there are 1,495 open-end registered investment companies that report
on Form N-CEN. SEC, Data, Form N-CEN Data Sets, available at https://www.sec.gov/dera/data/form-ncen-data-sets.
\12\ According to the Commodity Futures Trading Commission
(CFTC), there are 62 futures commission merchants as of October 31,
2023. See CFTC, Financial Data for FCMs, available at https://www.cftc.gov/MarketReports/financialfcmdata/index.htm.
\13\ According to National Futures Association, there are 937
introducing brokers in commodities as of November 30, 2023.
---------------------------------------------------------------------------
a. Update and maintain beneficial ownership identification
procedures: 20 minutes.\14\
---------------------------------------------------------------------------
\14\ See FinCEN, Customer Due Diligence Requirements for
Financial Institutions Final Rule, 81 FR 29398 (May 11, 2016). The
final rule recognized a burden of 56 hours to develop the initial
procedures (40 hours for small entities). Once procedures are
developed, an annual burden of 20 minutes is recognized for
revisions to and maintenance of such procedures. Covered financial
institutions were required to comply with this rule by May 11, 2018,
so no burden hours are included in this analysis for the initial
development of procedure.
---------------------------------------------------------------------------
b. Customer identification, verification, and review and
recordkeeping of the beneficial ownership information: 80 minutes. A
range of 40 to 120 minutes per legal entity customer (an average of 80
minutes per legal entity customer).\15\
---------------------------------------------------------------------------
\15\ See FinCEN, Agency Information Collection Activities;
Proposed Renewal; Comment Request; Renewal Without Change of the
Beneficial Ownership Requirements for Legal Entity Customers, 84 FR
72137 (Dec. 30, 2019). On December 30, 2019, FinCEN published a
notice to renew the Beneficial Ownership Requirements for Legal
Entity Customers (the 2019 Notice). In response to the 2019 Notice,
a public policy, research and advocacy group, whose membership
includes a broad range of U.S. and U.S.-based banks, provided a
comment noting that the estimate for customer identification,
verification, and review and recordkeeping of beneficial ownership
information should be increased to a range of 40 to 120 minutes.
Because of its broad membership of banks impacted by the
regulations, FinCEN chose to take the average of the range of 40 to
120 minutes to estimate a new burden of 80 minutes per new account
opened by a legal entity customer. When the OMB control number was
renewed in 2020, that 80 minutes estimate was incorporated. For the
rationale for the increase in the burden estimate to 80 minutes per
new account opened by a legal entity customer, see Office of
Management and Budget, Supporting Statement for OMB Control Number
1506-0070, available at https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202003-1506-001.
---------------------------------------------------------------------------
Estimated Total Annual Responses: 5,723,096.\16\
---------------------------------------------------------------------------
\16\ See FinCEN, Customer Due Diligence Requirements for
Financial Institutions Final Rule, 81 FR 29398 (May 11, 2016). Based
on research conducted as part of the final rule, it was estimated
that each covered financial institution will open, on average, 1.5
new legal entity accounts per business day. There are 250 business
days per year. (15,221 covered financial institutions x 1.5 accounts
per day x 250 business days per year = 5,707,875 legal entity
accounts opened per year). 5,723,096 responses (5,707,875 accounts
to verify plus 15,221 covered financial institution's programs to
update).
---------------------------------------------------------------------------
Estimated Total Annual Recordkeeping Burden: 7,615,574 hours.\17\
---------------------------------------------------------------------------
\17\ 5,707,875 new legal entity accounts multiplied by 80
minutes per account established and divided by 60 minutes per hour
equals 7,610,500 burden hours to identify and verify beneficial
owners of new legal entity accounts per year. 20 minutes to update
and maintain beneficial ownership identification and verification
procedures within a covered financial institution's AML program
multiplied by 15,221 covered financial institutions and divided by
60 minutes equals 5,074 burden hours annually. The total annual
burden hours estimate for this information collection is (7,610,500
+ 5,074) 7,615,574 hours.
---------------------------------------------------------------------------
Estimated Total Annual Reporting and Recordkeeping Cost:
$372,782,347.30 (7,615,574 hours multiplied by $48.95).\18\
---------------------------------------------------------------------------
\18\ The average hourly wage rate is calculated from the May
2022 U.S. Bureau of Labor Statistics (BLS) median hourly wage for
``13-1041 Compliance Officer'' of $34.47. See BLS, Occupational
Employment and Wages Statistics (May 2022), available at https://www.bls.gov/oes/tables.htm. The ratio between benefits and wages for
private industry workers is $12.19 (hourly benefits)/$29.34 (hourly
wages) = 0.42, as of September 2023. The benefit factor is 1 plus
the benefit/wages ratio, or 1.42. See BLS, Employee Costs for
Employee Compensation (Sept. 2023), available at https://
www.bls.gov/ecec/
home.htm#:~:text=Employer%20costs%20for%20private%20industry,percent%
20of%20total%20compensation%20costs. The fully-loaded wage rate is
$48.95 ($34.47 multiplied by 1.42).
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An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
OMB control number. Records required to be retained under the BSA must
be retained for five years.
Request for Comments: Comments submitted in response to this notice
will be summarized and/or included in the request for OMB approval. All
comments will become a matter of public record. Comments are invited
on: (a) whether the collection of information is necessary for the
proper performance of the functions of the agency, including whether
the information shall have practical utility; (b) the accuracy of the
agency's estimate of the burden of the collection of information; (c)
ways to enhance the quality, utility, and clarity of the information to
be collected; (d) ways to minimize the burden of the collection of
information on respondents, including through the use of automated
collection techniques or other forms of information technology; and (e)
estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
Jimmy L. Kirby, Jr.,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2024-03965 Filed 2-23-24; 8:45 am]
BILLING CODE 4810-02-P