National Security, Illicit Finance, and International Financial Institutions Subcommittee Reviews Financial Crimes Enforcement Network Operations and Anti-Money Laundering Reforms

Yesterday, the House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions, led by Chairman Warren Davidson (OH-08), held a hearing to examine efforts to strengthen the national anti-money laundering framework, improve FinCEN’s effectiveness, and combat illicit finance while reducing unnecessary regulatory burdens.

On FinCEN’s Fraud Prevention and Enforcement Efforts:

Full Committee Chairman French Hill (AR-02) said, “"FinCEN sits at the center of our efforts to combat money laundering, terrorist financing, fraud, scams, and other illicit financial activity that undermines our financial system.”

Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity Chairman Frank Lucas (OK-03) questioned Financial Crimes Enforcement Network Director Andrea Gacki on FinCEN’s repatriation efforts, to which she replied, “Since I last testified before this [Committee], FinCEN has interdicted $152 million and recovered $83.5 million for 381 U.S. victims. Since the program began in 2015, we have interdicted more than $1.8 billion and recovered more than $1 billion for 6,000 or more U.S. victims.”

Director Gacki said, “In support of the White House Task Force to Eliminate Fraud, and under the leadership of Secretary Bessent, FinCEN has taken decisive action to identify typologies associated with fraud schemes, including those being perpetrated by organized crime groups and transnational criminal organizations against government healthcare and other benefit programs. We have alerted financial institutions, the public, and law enforcement to these schemes; provided expert analysis of potential fraudulent activity for law enforcement; trained government stakeholders on how to use BSA data in their investigations; and issued guidance making it clear how financial institutions can share information on fraud with each other in real-time.”

On Modernizing Anti-Money Laundering Reporting Requirements:

Subcommittee Chairman Davidson said, "Every year, financial institutions file nearly 5 million suspicious activity reports, or SARs, and over 21 million currency transaction reports, CTRs, with FinCEN. These reporting thresholds have never been adjusted for inflation. Worse, GAO reports that only 5.4 percent of CTRs are even looked at by law enforcement, while BSA enforcement drives financial institutions to file copious amounts of defensive SARs that serve no meaningful law-enforcement purpose. What does all this reporting achieve? Only 1 percent of laundered proceeds are ever intercepted. And it comes with real costs – the BSA compliance reportedly costs $52 billion each year.”

Subcommittee on Financial Institutions Chairman Andy Barr (KY-06) said, “Despite FinCEN’s recognition that CTR and SARs thresholds are outdated and have produced millions of useless reports, FinCEN has consistently failed to update the thresholds.”

On Beneficial Ownership Reporting and Privacy:

Small Business Committee Chairman Roger Williams (TX-25) said, “The Biden administration's BOI reporting regulations required millions of small business owners to submit personal information to a federal database. And since taking office, the Trump administration has revised this disastrous rule, and American businesses are no longer required to submit this data. And FinCEN still holds the data collected under Biden's regulations. I, like many business owners, I'm a business owner in Texas, have concerns that large federal databases of private information present a privacy risk. If that database were ever breached or misused, the effects would be devastating for businesses across the country.”

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