Evaluating the Financial Crimes Enforcement Network
House Subcommittee on National Security, Illicit Finance, and International Financial Institutions
2025-09-09
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Source: Congress.gov
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International financial institutions will come to order. Without objection, the chairman is authorized to declare a recess of the committee at any time. This hearing is titled Evaluating the Financial Crimes Enforcement Network. Without objection, all members will have five legislative days within which to submit extraneous materials for inclusion in the record. I now recognize myself for four minutes for an opening statement. This is the third hearing with the Director of FinCEN as required by Section 5336 of the Corporate Transparency Act. Today provides a public forum to examine FinCEN's operations, the troubled status of the Beneficial Ownership Information Reporting Regime, Anti-Money Laundering Act of 2020, and the history and impact of the Bank Secrecy Act. The goal of this hearing is to assess these tools for targeted reforms that enhance security without trampling on privacy and innovation. This testimony should help Congress assess how these frameworks target real threats, like terrorist and cartel financing networks, scam centers, and other illicit finance. The big question is how to do it all while avoiding surveillance of law-abiding Americans and small businesses. The Bank Secrecy Act was enacted in 1970 with a narrow, good intention to create transparency against organized crimes, infiltration of our financial system. Over decades, the BSA has morphed into a bloated surveillance machine, demanding endless reports from banks, businesses, and individuals without delivering proportional results. Today, this framework's dangerously outdated, and the BSA's one-size-fits-all mandates are tying up lots of resources. Are they being used effectively? In recent years, the Bank Secrecy Act, Corporate Transparency Act, and the Money Laundering Act of 2020 have proven sometimes ineffective but always cumbersome. For example, FinCEN's own data shows that from 2014 to 2023, law enforcement agencies only accessed about 5.4% of the millions of currency transaction reports filed under the Bank Secrecy Act, highlighting how this flood of paperwork buries real leads in bureaucracy instead of focusing on bad actors.
And on the CTA front, we've seen FinCEN issue over broad rules that treat every mom and pop shop around the country as potential money launderers, forcing disclosure of person identifiable information into a federal database that isn't well safeguarded against tax or misuse. That's not security, that's an invitation for abuse. And we've witnessed it in other cases like Operation Choke Point. While millions of American businesses are relieved by March's delay, delayed enforcement of the Corporate Transparency Act's beneficial ownership mandates, they await clear guidance from FinCEN about what the future looks like. We appreciate the interim rule, and we're happy to work to finalize it. We are, in fact, working on a law to cement it. the market really wants clarity and certainty on where things are headed. Meanwhile, true threats like Chinese fentanyl cartels are laundering billions through US real estate, or Russian oligarchs are sometimes evading sanctions. They slip through because resources are tied up with collection rather than analysis. We need to index outdated CTR thresholds for inflation. We should codify the full repeal of CTA's beneficial ownership mandate on U.S. businesses and focus it on external threats. This hearing is our chance to demand accountability without a yield to balance my time. And I now recognize the ranking member of the subcommittee, Ms. Beatty, for four minutes for her opening statement.
Thank you, Mr. Chairman, and certainly thank you for being here, Director Gacke. You're going to have a lot coming at you today as our only witness sitting up there. And I think you should take that as because you have so much experience. You have worked through President Trump's administration, President Biden's administration. And so we're hoping that today's hearing will shed light on the national security consequences if we cripple your office and our financial crime programs. Because one thing I can tell you is that we all are against corruption. No one wants to be engaged sitting on this committee by the very nature of the title that my Republican colleagues have named it. So I am very anxious to hear from you today. So we know that the Financial Crime Enforcement Network is small, but it is of vital importance in a bureau at the Treasury Department that is tasked with protecting our financial system from traffickers, from money launderers, from terrorist facilitators and other bad actors. To put this work in perspective, let's look, for example, at something that we've all been engaged with on both sides of the aisle, and that's illicit fentanyl. that trade that has devastated our communities over the last decade. And I can say as well as I'm sure our chairman will because we're both from Ohio and what has happened in our districts. FinCEN follows the money to the origins of these drug supply chains to disrupt finance streams wherever it can, hopefully preventing synthetic opioids like fentanyl from entering our country. When my constituents ask me what we're doing in Congress to stop fentanyl deaths and protect our communities, I tell them about the important work that we do on this committee to make it tougher, to make it less profitable for drug traffickers, and to
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