Banking association backs financial transparency bill

A trade association that represents the largest U.S. commercial banks is backing legislation aimed at ending anonymous shell companies.

"We believe the bill would assist public sector efforts to identify money laundering and terrorist financing through the disclosure of the beneficial owners of corporations," The Clearing House Association said in a letter Monday to the sponsors of the legislation: Sen. Chuck GrassleyChuck GrassleyFranken targets senators from both parties in new comedy tour Grassley leads Finkenauer by 18 points in hypothetical matchup: poll 62 percent in Iowa disapprove of Biden, poll shows MORE (R-Iowa), Sen. Sheldon WhitehouseSheldon WhitehouseDemocrats draw red lines in spending fight What Republicans should demand in exchange for raising the debt ceiling Climate hawks pressure Biden to replace Fed chair MORE (D-R.I.), Rep. Pete King (R-N.Y.) and Rep. Carolyn Maloney (D-N.Y.).

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"We can see no justification for allowing corporations to shield their ownership," the group added.

Under current law, companies do not have to disclose to state governments their true owners at the time that they are incorporated. The legislation would require companies to report ownership information at the time of incorporation and when there is a change in ownership.

The Clearing House Association said it "wholeheartedly" backs the bill and recommended the legislation clarify that financial institutions can get access to the ownership information that would be reported to states.

"Under the current regime, many if not most of the resources devoted to identifying money laundering and terrorist financing are provided by financial institutions," the association said. "Denying them access to this important information would significantly undermine the goals of the bill."

The Clearing House is owned by banks including Bank of America, Citibank and Wells Fargo.