According to FinCEN FAQ19, we only need to identify one of multiple trustees on the CBO form. If we enter the individual's name, it gives the impression that they personally have beneficial ownership.

Will you be instructing your staff to enter "Trustee" after their name to make it clear that a trust is involved?

We had previously added a "Title" field to the Certification for each BO; we're training folks to record "Trustee of XYZ Trust" in that field. We also have a drilldown section on our form so the XYZ Trust itself will be reflected there.

One more question.

We have a trust division. If the bank is the trustee of an account, it appears that the bank should be identified as the Beneficial Owner and that an individual in our trust department should be identified as a Control Person.

Did I read Q20 correctly?

That's how I read it.

Beneficial owners have to be natural persons. Question 20 notes that you may not have a natural person to satisfy the "ownership" prong, but reminds you that you still need a "control" prong.

The statement to "identify the legal entity according to your CIP" means that if your current (pre 5/11/18) CIP procedures require you to identify the legal entity, then continue to follow your pre 5/11/18 procedures and also get the control prong. I doubt that the bank is performing CIP on itself under the current procedures so you will not have any natural persons to identify for the "ownership" prong since the trustee is a legal entity, but make sure you still get one "control" prong person.

Brian,

Thank you! I went back and read it again and now it makes sense!

I'm hoping someone can help me with this. I got this question from a lender today.

We have a borrower that is an LLC created for the purpose of taking title to the property. The LLC is owned 100% by Company II. Company II has common and preferred ownership interests. Company II "Preferred" is owned 50/50 by two trusts (trustees are individuals). Company II "Common" is owned approx. 16.66% each by six trusts (trustees are individuals). Which "level" do I use to determine beneficial owners? I assume it would be the Preferred level, is that correct?

You would look at both Common and Preferred. Starting with Common, there are six owners (all trusts), none of which has 25%. You can ignore them. For Preferred, you want the entity to tell you what percentage of Company II's equity they hold. Preferred might hold only 20% total of Company II's equity, in which case, there won't be ANY 25% beneficial owners. Or they might hold half of Company II's equity, which would mean each of the two trusts would have 25% indirect ownership in the LLC.

The problem with your scenario, New Manager, is that you don't have enough information from the legal entity. It's clear you can ignore the Common stock owners (six trusts, none of which holds more than 25%, even if the Common stockholders have ALL the equity of Company II). Preferred stockholders may or may not have equity interest, or they may, as a group, have only X% of the equity. Without knowing what the Preferred stock arrangement is, you can't answer the question. So you need the legal entity to come up with the answer.