Luetkemeyer Delivers Remarks at Hearing to Examine the Potential Consequences of FinCEN’s Beneficial Ownership Rulemaking
Washington,
July 18, 2023 -
Today, the House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions, led by Chairman Blaine Luetkemeyer (MO-03), is holding a hearing entitled “Potential Consequences of FinCEN’s Beneficial Ownership Rulemaking."
Watch Chairman Luetkemeyer’s opening remarks here.
Read Chairman Luetkemeyer’s opening remarks as prepared for delivery:
“Today’s hearing focuses on Beneficial Ownership, and the Financial Crimes Enforcement Network, otherwise known as FinCEN’s, rulemaking required by the Corporate Transparency Act.
“Beneficial ownership information reporting has been touted as one of the most important national security tools. Yet no one knows anything about it.
“It is my hope that today’s hearing will not only inform our constituents of this forthcoming rule but will shine light on the ways the Treasury Department and FinCEN have distorted the purpose of this rulemaking.
“However, before we dive into the weeds, it is important to set the stage.
“Some of my colleagues across the aisle today may insinuate that Committee Republicans never supported Beneficial Ownership, and our actions since the passage of the CTA were carried out to undermine the legitimacy of the final rule.
“Nothing could be further from the truth.
“I personally worked with Former Congresswoman Carolyn Maloney on an earlier iteration of the CTA. This bill, while not identical to the final CTA, was founded on the same principles.
“On one hand, Federal law enforcement and our local sheriffs were banging down our doors warning about the ways in which bad actors were hiding illicit profits in shell companies.
“On the other, small, medium, and large banks alike were frustrated with burdensome regulation without any feedback from the government.
“To fix this problem, Chair Maloney and I decided to shift the burden from the banks and place it on the Federal government.
“If law enforcement and FinCEN wanted the information seamlessly, they would need to be responsible for its collection.
“Since that initial bipartisan attempt, the CTA changed slightly but never lost its foundational principle: if the U.S. government wants the information, the U.S. government should be responsible for it.
“Now we find ourselves in a precarious situation. We are less than six months away from the CTA’s effective date of January 1, 2024, and we are left with more questions than answers.
“In an effort to prepare for today’s hearing, I joined a letter in June with Chair McHenry, Chair Williams, and Chair Womack expressing our concerns with FinCEN’s rollout of the Beneficial Ownership plan.
“This letter asked some important questions about how FinCEN plans to educate 32.6 million small businesses about their new obligations.
“This should not have been a difficult letter to respond to.
“With less than six months to go, the education plans should be completed and ready to roll out well before the system goes live in January.
“Disturbingly, despite the Committee’s request for information on the education and roll out strategy, there has been no response.
“The education issue, while it may seem trivial to those not paying attention, is indicative of the larger issues with the BOI rulemaking process.
“FinCEN and main Treasury have transformed a simple-to-follow filing system into complex maze leaving many scratching their heads.
“As I am sure we will hear from our witnesses, FinCEN is asking for more money and more resources, but time and time again they favor complexity over straightforwardness.
“Complexity that will result in small business owners needing to hire lawyers to figure out simple things like if they need to file.
“This rulemaking process must be corrected. Our constituents deserve better than what FinCEN has put forward thus far.
“I do not see how FinCEN can move forward with a January 1 BOI effective date without having a plan. I ask all of my colleagues to remember that if this filing system is not seamless, it is our small businesses picking up the pieces from COVID that will suffer.
“We need FinCEN to do better, and today’s hearing shall be a start in outlining what that could look like.”
