The National Association of Attorneys General (NAAG) today called on the Financial Crimes Enforcement Network (FinCEN) to allow state, local, and tribal entities to have appropriate and timely access to corporate ownership information critical to fighting crime and terrorism.
A letter, signed by 42 attorneys general, was sent yesterday to FinCEN, a bureau of the U.S. Department of Treasury, outlining the need for non-federal entities to access information without unnecessary and burdensome requirements.
The creation of a national database is part of the Corporate Transparency Act, passed in 2021 to require certain companies to disclose their actual, or “beneficial,” owners to FinCEN. The bureau’s recently proposed requirements for database access would impede investigations taking place at the state, local and tribal level.
In particular, the Corporate Transparency Act only requires state, local, and tribal entities to obtain a court order authorizing access to the database. The new regulations, however, would require non-federal entities to provide a separate written justification to FinCEN and call for the bureau to review and approve the court order before allowing access to the database information. The letter notes that the requirement is inconsistent with Congress’ decision to create the database to provide rapid access to beneficial ownership information.
“We look forward to working with FinCEN on the implementation of this database to ensure that we and other entities can use it as Congress intended: as a highly useful tool to help us efficiently access important beneficial ownership data to serve and protect the public,” the letter states.
In addition to requesting that all law enforcement entities receive unobstructed access to the database, attorneys general advocated for several amendments to the proposed regulations, including one to make it clear that individuals who receive database information during a legal case are subject to the same non-disclosure laws as those who receive the information directly from FinCEN. The amendment would remove the burden of notification from prosecutors and other government attorneys.
This isn’t the first time the attorneys general have collectively weighed in on this issue. In 2021, 40 attorneys general filed a letter in response to the Advanced Notice of Proposed Rulemaking (ANPRM) regarding the CTA’s proposed beneficial ownership database. A similar NAAG letter supporting predecessor legislation was signed by 42 attorneys general and issued in 2020.
The letter was signed by attorneys general from Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Commonwealth of the Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Vermont, Washington and Wisconsin.