CRS Reviews FinCEN’s Implementation of the Anti-Money Laundering Act
Commentary by Thomas Delaney
The Congressional Research Service ("CRS") reviewed how the Financial Crimes Enforcement Network ("FinCEN") is implementing the Anti-Money Laundering Act of 2020 ("AMLA") amid changing regulatory priorities.
In the report, the CRS characterized the AMLA as the most significant overhaul of the Bank Secrecy Act ("BSA") since 1970. The AMLA spans 59 provisions and aims to modernize the U.S. anti-money laundering and counter-terrorist financing ("AML/CFT") framework. The CRS highlighted key reforms in the AMLA, including expanding the BSA’s purpose, strengthening enforcement tools, enhancing whistleblower incentives, and promoting public-private information sharing. The report also highlighted the Corporate Transparency Act ("CTA"), which requires certain legal entities to report their beneficial owners to a FinCEN database. The CRS noted that this requirement was designed to address longstanding risks posed by anonymous shell companies. The CRS further underscored FinCEN’s central role as the federal government’s financial intelligence unit, responsible for collecting and analyzing millions of financial reports and supporting law enforcement investigations.
The CRS explained that AMLA implementation has been uneven. While FinCEN completed or advanced some rulemakings and reporting requirements, several initiatives have been delayed or withdrawn. These include proposed rules for antiquities dealers, a pilot program to allow sharing of suspicious activity reports ("SARs") with foreign affiliates, and a no-action letter process. The CRS also noted ongoing efforts to update AML/CFT priorities and review existing requirements, including potential changes to SAR and currency transaction report filings. The CRS stated that resource constraints and the complexity of the law have posed challenges for timely implementation.
The CRS also highlighted a major policy shift in March 2025, when FinCEN issued an interim final rule narrowing the scope of the CTA. The rule exempts all domestic reporting companies and U.S. persons from beneficial ownership reporting, limiting the requirement largely to foreign entities registered in the United States. The CRS explained that Treasury relied on statutory exemption authority and cited regulatory burden concerns, particularly for small businesses when issuing the rule. The CRS also noted bipartisan criticism from Congress and ongoing legislative activity, including proposals to repeal the CTA and others to strengthen its implementation. The CRS further observed that FinCEN’s FY2026 priorities reflect a broader "deregulatory agenda," with less emphasis on beneficial ownership reporting and greater focus on streamlining requirements and targeting higher-risk activity. The CRS concluded that the scope and direction of AMLA implementation remain uncertain and subject to ongoing policy and legislative developments.
Commentary
The CRS correctly notes that implementation of the Corporate Transparency Act ("CTA") beneficial owner registration requirements has been choppy.
The CTA was passed on a substantially bipartisan basis in response to concerns that the U.S. had become an international outlier for not requiring LLCs and other corporate entities to disclose their beneficial owners, thereby facilitating potential money laundering by drug cartels, human traffickers and terrorist financiers.
After working to publish regulations to implement the CTA, FinCEN ran into substantial political headwinds from privacy advocates. as well as wealthy investors. who voiced concern about the burdens associated with complying with CTA registration. As a result, the Trump Administration suspended CTA compliance for U.S. corporations, essentially putting the US back in the position it was in in 2016. That year, the Financial Action Task Force ("FATF") issued a Mutual Evaluation Report criticizing the U.S. as being non-compliant with international AML standards regarding beneficial owner transparency.
It is difficult to say whether the CTA registration procedures will be resuscitated any time soon for domestic companies, however, that should not be taken as an indication of U.S. complacency with respect to AML enforcement. As reflected by the record of enforcement actions taken by FinCEN since President Trump took office, FinCEN was busy in 2025 and early this year, pursuing money services businesses and broker-dealers, among others, for AML compliance violations.