FinCEN Retreat Pushes Banks Toward Private Ownership Data

The Corporate Transparency Act was designed to give the U.S. Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, a centralized record of the people who ultimately own or control companies. The database was intended to aid anti-money-laundering enforcement and customer checks. Although domestic reporting has been dismantled, banks still must identify customers and controlling parties under existing due-diligence rules, leaving them with obligations but less comprehensive government-supplied data.

FinCEN issued an interim final rule on March 21, 2025, exempting U.S.-formed companies and U.S. persons from beneficial ownership information reporting. The rule took effect March 26, while existing foreign entities registered to do business in the U.S. faced an April 25 deadline. Banks are consequently relying more heavily on private data vendors, entity resolution and corporate identity graphs to uncover hidden links, a shift likely to widen the compliance gap between large institutions and smaller lenders with limited technology budgets.