S.1995 - FinCEN–SBA Coordination on Beneficial Ownership Registration Act (119th Congress)
Summary
S.1995, the FinCEN-SBA Coordination on Beneficial Ownership Registration Act, aims to improve the dissemination of information regarding beneficial ownership reporting requirements under section 5336 of title 31, United States Code. It mandates that the Director of the Financial Crimes Enforcement Network (FinCEN) and the Administrator of the Small Business Administration (SBA) establish a memorandum of understanding (MOU). This MOU is intended to ensure that small businesses are well-informed about their obligations under the Corporate Transparency Act.
The bill outlines specific activities to be carried out jointly by FinCEN and the SBA, including disseminating covered information, providing it in multiple languages, and implementing plans to counter scams related to beneficial ownership reporting. It also requires regular meetings and reports to relevant congressional committees to assess the effectiveness of the MOU.
Ultimately, the goal is to increase compliance with beneficial ownership requirements, thereby helping to combat illicit activities such as money laundering and terrorism financing.
Expected Effects
The bill's enactment will lead to increased coordination between FinCEN and the SBA in educating small businesses about beneficial ownership reporting requirements. This will likely result in a higher rate of compliance among small businesses.
Furthermore, the mandated reporting and review processes will provide ongoing oversight and adjustments to the outreach efforts. The Act will also help to protect small businesses from scams related to beneficial ownership reporting.
Potential Benefits
- Improved Compliance: Increased awareness and understanding of beneficial ownership requirements among small businesses.
- Reduced Illicit Activity: Enhanced efforts to combat money laundering, terrorism financing, and other financial crimes.
- Protection from Scams: Measures to identify and counter fraudulent schemes targeting small businesses.
- Multilingual Support: Availability of information in multiple languages, making it accessible to a broader range of business owners.
- Enhanced Coordination: Streamlined communication and collaboration between FinCEN and the SBA.
Potential Disadvantages
- Administrative Burden: Potential costs and time associated with implementing and maintaining the memorandum of understanding and reporting requirements.
- Potential for Redundancy: Overlap with existing outreach efforts by FinCEN and the SBA.
- Limited Scope: Focus primarily on information dissemination, with less emphasis on other potential barriers to compliance.
- Enforcement Challenges: The bill does not directly address enforcement mechanisms for non-compliance.
- Possible Unintended Consequences: The increased reporting requirements could potentially create additional burdens for small businesses, although the intent is to minimize these.
Constitutional Alignment
The bill appears to align with the US Constitution, particularly Article I, Section 8, which grants Congress the power to regulate commerce. By addressing illicit financial activities that affect interstate and foreign commerce, the bill falls within the scope of congressional authority.
Furthermore, the emphasis on providing information and support to small businesses does not infringe upon individual liberties or rights protected by the Bill of Rights. The reporting requirements are designed to combat financial crimes, which is a legitimate government interest.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).