On a rare New Year’s Day session, Congress voted to override President Trump’s veto of the National Defense Authorization Act (NDAA). The president objected to the bill because it did not repeal Section 230 of the Communications Decency Act, which shields news and social media companies for their content moderation policies. With the move, the law creates a new beneficial ownership registry for shell companies. ALTA members asked members of Congress to co-sponsor the bill during the 2019 ALTA Advocacy Summit.
With the law passed, FinCEN will get to work building the registry system. Over the next two years, shell companies will have to file their beneficial ownership information with FinCEN. The information will be updated whenever the company’s ownership changes hands. There are a number of exemptions to the filing, especially if the company already has to file this information as part of an SEC or other financial regulatory requirement.
Title companies report beneficial ownership information to FinCEN as part of the Geographic Targeting Orders (GTOs). This is the one piece of information the industry does not have another business reason to collect and has no verification source.