HFS Subcommittee Reviews FinCEN Operations and Oversight

At a House Financial Services Subcommittee hearing, representatives questioned the Director of FinCEN on current operations, and the scope of the bureau's mandate under the Corporate Transparency Act and the Bank Secrecy Act.

National Security, Illicit Finance, and International Financial Institutionson Subcommittee Chair Warren Davidson argued that the Bank Secrecy Act has expanded far beyond its original purpose and now functions as a costly surveillance regime. He said FinCEN’s sweeping reporting mandates overwhelm useful intelligence, burden small businesses, and compromise privacy, citing underused currency transaction reports and expansive Beneficial Ownership rules. He urged reforms to update thresholds, repeal the Corporate Transparency Act's beneficial ownership mandates on U.S. businesses, and redirect resources toward high-risk foreign threats.

In her testimony, Andrea Gacki, Director of FinCEN, addressed the concerns:

1. AML/CFT Modernization. Ms. Gacki stressed the importance of modernizing the Bank Secrecy Act framework, so compliance is risk-based and focused on the highest-priority threats. She suggested streamlining suspicious activity reports and currency transaction reports, easing outdated requirements, and allowing banks to dedicate resources toward higher-risk customers and activities.
2. Beneficial Ownership Rules. Ms. Gacki explained that FinCEN issued an interim final rule in March 2025 that exempts U.S. companies from Corporate Transparency Act reporting. She stated that the rule narrows reporting obligations to certain foreign entities registered to do business in the United States.
3. Digital Assets. Ms. Gacki underscored FinCEN’s commitment to responsible growth of digital assets while mitigating illicit finance risks. She pointed to upcoming rulemakings under the GENIUS Act that will extend Bank Secrecy Act obligations to stablecoin issuers and highlighted ongoing engagement with industry and law enforcement to ensure oversight of blockchain-based finance is both effective and appropriately tailored.

Ms. Gacki also outlined FinCEN’s efforts to counter cartel-linked financial institutions under the Fentanyl Sanctions Act, increase pressure on Iran and Cuba, and address human trafficking, child exploitation, and cross-border smuggling. She pointed to the growing volume of fraud and cybercrime, highlighting proposed action against the Cambodia-based Huione Group for laundering tied to North Korea and Southeast Asian crime networks.

HFS Ranking Member Maxine Waters criticized Trump-era policies and Republican actions that she said weakened efforts to combat fraud and money laundering. She argued that dismantling regulatory agencies and curbing tools like the Corporate Transparency Act left consumers less protected, reduced government oversight, and created opportunities for corrupt actors.