June 09, 2026|Press
By Dan Novak
Rather than implement the CTA, the FinCEN is effectively directing banks to find and report perpetrators, said Buchalter partner Jonathan Wilson. However, the SAR reporting regime alone is ineffective at finding illicit activity, Wilson said.
“What would be effective is a screening mechanism, which is exactly what the Corporate Transparency Act was supposed to be,” he said. “The administration wants to be tough on immigration and tough on money laundering, but it just took away its best rule.”
Wilson said the advisory suggests that Treasury will be more robust in auditing Know-Your-Customer onboarding for banks—the process by which banks verify a new client’s identity and financial risk. However, KYC rules do not require banks to monitor the ongoing beneficial ownership of an entity, something that was addressed by the now-defunct beneficial ownership rule.
“In lieu of implementing the Corporate Transparency Act, they say, ‘OK, banks, expand your SAR reporting in order to find all the money laundering that’s going on out there,” Wilson said. “Well, it creates the appearance of doing something serious without actually accomplishing much other than perhaps to increase the regulatory cost.”
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