November 15, 2023

The Financial Crimes Enforcement Network (FinCEN) transmitted to the White House Office of Information and Regulatory Affairs (OIRA) for review the text of its final rule on “Beneficial Ownership Information Access and Safeguards” that SWACCA submitted comments in February 2023.

In those comments, SWACCA highlighted its support for the proposed rule’s interpretation that engaging in “law enforcement activity” includes “investigative and enforcement activities relating to civil or criminal violations of law,” such as investigations related to worker misclassification. SWACCA has been advocating for this interpretation since before it submitted comments in May 2021 to FinCEN on implementation of the Corporate Transparency Act’s beneficial ownership reporting regime. SWACCA has been urging FinCEN to extend authorization to access beneficial ownership information to all federal, state, and local regulatory agencies engaged in investigations of wage theft and tax and payroll fraud associated with the misclassification of workers as independent contractors. This includes pressing FinCEN to allow the U.S. Department of Labor’s Wage and Hour Division and other federal agencies to directly query the beneficial ownership database in investigations of wage theft and other legal violations commonly associated with the misclassification of workers in the construction industry. SWACCA has also advocated for allowing FinCEN to disclose beneficial ownership information to state, local, and Tribal law enforcement agencies if a court of competent jurisdiction has authorized such law enforcement agency to seek the information in a criminal or civil investigation.

Since before filing comments on beneficial ownership implementation in May 2021, SWACCA has been engaged in advocacy with FinCEN reflected in our comment letters. While we await the final rulemaking, we are pleased that this engagement has already helped to prompt FinCEN’s August 15, 2023 notice urging U.S. financial institutions to take extra precautions to prevent the banking system from being used to facilitate a “concerning increase in state and federal payroll tax evasion and workers’ compensation insurance fraud in the U.S. residential and commercial real estate construction industries.”

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