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Waters Urges Increase in FinCEN Appropriations to Support Landmark Bipartisan Legislation to Combat Financial Crime

Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, sent a letter to senior Members of the House Committee on Appropriations, Subcommittee on Financial Services and General Government, urging them to support supplemental funding to the Financial Crimes Enforcement Network (FinCEN).

“I write to urge a substantial increase of not less than $74.3 million in new funding for the Financial Crimes Enforcement Network (FinCEN) to support the initial stages of the landmark reforms codified in the bipartisan Anti-Money Laundering Act of 2020 (AMLA) and the Corporate Transparency Act (CTA), enacted in the FY2021 National Defense Authorization Act (Public Law 116-283).” wrote Chairwoman Waters. “I strongly support this implementation funding request and hope that you will include this funding in any upcoming supplemental appropriations bill to be considered in the House…Effective implementation of these new mandates, coupled with the many additional duties that these laws impose on FinCEN and Treasury offices, will require a substantial and sustained investment of new resources… I believe that these funds are critical to properly implement the requirements of the AMLA and CTA.”

In March 2019, Chairwoman Waters introduced H. Res. 206, a resolution to shed light on money laundering and terrorism finance. The resolution was passed by a voice vote.

In November 2020, Chairwoman Waters secured the inclusion of provisions on beneficial ownership, preventing money laundering, and combatting international corruption in the FY2021 NDAA.

See the full text of the letter below.

The Honorable Mike Quigley, Chairman
Financial Services and General
Government Subcommittee
Committee on Appropriations
Washington, D.C. 20515

The Honorable Steve Womack, Ranking Member
Financial Services and General
Government Subcommittee
Committee on Appropriations
Washington, D.C. 20515

Dear Chairman Quigley and Ranking Member Womack: 

I write to urge a substantial increase of not less than $74.3 million in new funding for the Financial Crimes Enforcement Network (FinCEN) to support the initial stages of the landmark reforms codified in the bipartisan Anti-Money Laundering Act of 2020 (AMLA) and the Corporate Transparency Act (CTA), enacted in the FY2021 National Defense Authorization Act (Public Law 116-283). I strongly support this implementation funding request and hope that you will include this funding in any upcoming supplemental appropriations bill to be considered in the House.

On January 1, 2021, with overwhelming bipartisan support, Congress overrode a Presidential veto to enact AMLA, CTA, and other important anti-money laundering measures. As noted by Transparency International’s U.S. Office, “This is the first significant update to our anti-money laundering laws in twenty years, and one of the most important anti-corruption measures ever passed by the U.S. Congress.”[1]The Bank Policy Institute shared that, “This legislation warns the world that the U.S. will stop human traffickers, terrorists, and other global criminals in their tracks when they attempt to infiltrate the financial system.”[2]

To implement the activities mandated by these laws, the Treasury Department has estimated that the minimum amount of new funding necessary to implement this measure in FY 2021 is $74.3 million; I have enclosed the Department’s budget outline for these expenses as Appendix A.

The Corporate Transparency Act (CTA) requires all covered companies formed or registered in the United States to provide information to FinCEN on their ultimate beneficial owners (UBOs). FinCEN is, in turn, required to create and manage a database to maintain this UBO information and to provide access to the data, upon a qualified request, to key federal, state, and tribal law enforcement agencies, regulators, and federal national security and intelligence officials. Financial institutions seeking to confirm related customer information to facilitate their regulatory-required Customer Due Diligence process will also have access to the information.

The CTA’s requirement to have Treasury collect beneficial ownership information sets for the first time a clear federal standard for incorporation practices; protects vital national security interests; protects interstate and foreign commerce; better enables critical national security, intelligence, and law enforcement investigations; and will finally, after many years, bring the United States into compliance with international AML and Countering the Financing Terrorism (CFT) standards and catch up to partner countries that also have sophisticated financial sectors. The Act requires that beneficial ownership information collected be treated as sensitive, non-public information and allows it to be made available only to authorized authorities, subject to effective safeguards and controls. FinCEN must maintain this information in a new, secure, non-public database, utilizing information security programs and protocols that are appropriate to protect non-classified information systems at the highest security level. The agency must also take all steps, including regular auditing, to ensure that government authorities accessing the beneficial ownership information do so only for authorized purposes consistent with the law.

Similarly, the Anti-Money Laundering Act of 2020 (AMLA) strengthens, streamlines, and adds America’s AML/CFT regime. Its provisions to close money laundering loopholes, enhance FinCEN operations, broaden information sharing, protect whistleblowers, enforce compliance, and promote innovation dramatically improve America’s capabilities to fight financial crime. AMLA requires FinCEN to establish a small network of domestic liaisons across the country to bolster consultation and coordination with industry, law enforcement, and other stakeholders. It also directs the appointment of additional attachés and foreign Financial Intelligence Unit liaisons to work at U.S. embassies or in foreign government facilities, establishing closer relationships with foreign intelligence and finance ministry officials and regulators, coordinating with Department of Justice officials posted in embassies, and providing other support to Treasury efforts to combat illicit finance.

The AMLA further requires the Secretary to develop public AML priorities and requires regulators to examine based, in part, on these priorities. It requires FinCEN to better track Bank Secrecy Act (BSA) information used to support law enforcement investigations and to enhance communication with financial institutions and state and federal supervisors, including by bolstering AML training programs. The Act amends FinCEN’s statutory duties, expands its coordination and cooperation with tribal law enforcement, and clarifies that the agency’s statutory duties and powers now include supporting intelligence and counterintelligence activities to protect against all forms of terrorism. The law also requires the development of Treasury-led government-wide strategies to combat money laundering by the People's Republic of China; to address the tens, if not hundreds, of billions of U.S. tax dollars lost each year to trade-based money laundering; and to address the de-risking of charities and others that have experienced reduced access to cross-border financial services, in part due to AML/CFT risk concerns.

Effective implementation of these new mandates, coupled with the many additional duties that these laws impose on FinCEN and Treasury offices, will require a substantial and sustained investment of new resources. I have attached Appendix B, a section-by-section summary of the bill to provide a more detailed sense of the many new requirements and FinCEN duties that they contain.

I understand that full, robust implementation of these measures would require approximately $98.5 million for FY 2021. After consulting with OMB, FinCEN has scaled back a few of its requirements and proposed delaying some of the hiring required by the new law, including the FIU and domestic liaison staff and other mission support staff. It is also taking other steps to constrain spending. Those changes have resulted in the new, reduced allocation requirement of $74.3 million outlined in the attached justification.

As the chair of the authorizing committee, I fully support Treasury’s request and strongly urge approval of supplemental funding of not less than $74.3 million. I believe that these funds are critical to properly implement the requirements of the AMLA and CTA. If additional funds are available, in order to provide maximal hiring flexibility to FinCEN in FY21, I would also support an expanded appropriation of $98.5 million in new funding for FY21.

Thank you for your assistance in this matter. I look forward to working with you to ensure the sufficient funding to enable the Treasury Department to promptly and effectively implement these important new national security and law enforcement measures. If you or your staff have any questions about our request, please feel free to have your staff contact Danielle Camner Lindholm of Chairwoman Waters’ staff at 202-365-9487.

Sincerely,

MAXINE WATERS
Chairwoman

           

cc:      The Honorable Rosa L. DeLauro, Chairwoman, House Committee on Appropriations 
           The Honorable Kay Granger, Ranking Member, House Committee on Appropriations 
           The Honorable Patrick McHenry, Ranking Member, Committee on Financial Services

Enclosures:

Appendix A – Treasury Cost Estimates for Implementing AMLA and CTA
Appendix B – Section-by-Section Summary of AMLA and CTA



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