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Corporate Transparency Act's Impact on Loan Transactions: Pre-Closing Due Diligence, Legal Opinions, Loan Documentation

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Thursday, February 22, 2024

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This CLE webinar will discuss the effect of the Corporate Transparency Act's (CTA) beneficial ownership information (BOI) rule on loan transactions, including pre-closing due diligence procedures, legal opinions, and loan processing procedures and documentation. The panel will review the new requirements and provide steps lenders should take now to prepare for these new compliance obligations.


Beginning Jan. 1, 2024, the CTA requires certain U.S. and foreign entities defined as "reporting companies" to report certain identifying information about themselves, their beneficial owners, and, in some cases, company applicants to FinCEN (the U.S. Dept. of the Treasury's Financial Crimes Enforcement Network) within a certain prescribed time period. FinCEN is tasked with establishing and maintaining a database of beneficial ownership information and has issued a final rule governing access to the database. The final rulemaking implementing the CTA will make conforming changes to the beneficial ownership provisions of FinCEN's existing customer due diligence rule. Although that rulemaking has not yet begun, lenders must understand their potential compliance obligations under the CTA and amend their loan processing procedures and documentation accordingly.

The CTA is part of a growing trend to require greater transparency in beneficial ownership of state-registered entities. Both New York and Pennsylvania have enacted similar reporting requirements as the CTA and a California bill is currently under consideration.

Lenders should be aware of the new BOI rule of the CTA and similar state requirements and start taking steps now to confirm compliance. Such steps should include adding confirmation of CTA compliance to pre-closing due diligence procedures, including representations, warranties, and covenants in loan documentation that borrowers and guarantors have complied with the requirements of the CTA, and providing clauses in loan documents whereby the borrower gives consent for FinCEN to disclose applicable information to the lender.

Listen as our expert panel discusses the impact of the CTA and similar state laws on loan transactions. The panel will shed light on the various complexities, inquiries, and subtleties concerning the practical implementation of the CTA during pre-closing due diligence, closing, and the life of a loan.



  1. CTA overview
    1. Entities subject to the CTA and BOI rule
    2. Purpose of the BOI rule and the applicable effective dates
    3. Compliance requirements
    4. Information that must be reported
  2. Key exemptions from the BOI rule
  3. BOI rule's impact on loan transactions
    1. Pre-closing and due diligence procedures
    2. Legal opinions
    3. Changes to representations, warranties, and covenants in loan documents
    4. Qualification for creditor exception
  4. Steps lenders should take now to prepare for the CTA/BOI rule's compliance obligations


The panel will address these and other key issues:

  • What is the BOI rule under the CTA and what is its purpose?
  • What entities are subject to the BOI rule and what are the compliance requirements?
  • How will the BOI rule impact loan transactions?
  • Will the BOI rule impact loan agreement representations, warranties, and covenants?
  • What changes will lenders want to make to their loan origination procedures and documentation to comply with the BOI rule?


Bisanz, Matthew
Matthew Bisanz

Mayer Brown

Mr. Bisanz counsels domestic and global financial services firms on a variety of banking and derivatives regulatory...  |  Read More

Stipano, Daniel
Daniel P. Stipano

Davis Polk & Wardwell

Mr. Stipano represents clients in regulatory matters, including state and federal regulatory enforcement actions, and...  |  Read More

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