Legislation proposed to hold Financial Crimes Enforcement Network (FinCEN) more accountable to the public and small businesses
On April 28, the U.S. House Financial Services Committee held a hearing with Acting Financial Crimes Enforcement Network (FinCEN) Director Himamauli Das. Following the hearing, a letter of support was sent to Congressman Warren Davidson who is the sponsor of H.R. 7623, the Financial Crimes Enforcement Network Improvements Act, by NFIB.
FinCEN is currently expanding its regulatory authority to 30 million small businesses under a 2020 law known as the Corporate Transparency Act, and small business owners have long raised concerns about its federal reporting requirements and associated privacy concerns. In February, NFIB recommended nine adjustments to the Treasury Department in a letter, some of which are being addressed in H.R. 7623.
The Financial Crimes Enforcement Network Improvements Act would hold FinCEN more accountable to the public and small business community by establishing a special Deputy Inspector General for FinCEN as well as a Civil Liberties Protection Officer for FinCEN in the Treasury Department. It guarantees that FinCEN must follow all appropriate procedures when issuing rules such as giving the public at least 30 days’ notice before new FinCEN rules take effect, considering the impact of its proposed and final rules on small entities, and giving Congress time to review and, if necessary, overturn, significant FinCEN regulations before they take effect.
“NFIB appreciates your effort to bring accountability to FinCEN and protect the civil liberties of small business owners across the country,” said NFIB VP of Federal Government Relations Kevin Kuhlman in NFIB’s letter of support for the Financial Crimes Enforcement Network Improvements Act.
During the April 28 hearing, Congressman Patrick McHenry of North Carolina, Ranking Member on the Financial Services Committee commented, “FinCEN is one of the biggest data collectors in the U.S. Government, yet how they collect, manage, and allow access to that data remains a mystery. Unfortunately, after reading FinCEN’s notice of proposed rulemaking (NPRM), it is clear the agency needs a reminder on what Congress directed. The proposed rule was far too complex, overly broad, and deviated significantly from Congress’ intent.”
NFIB opposed the Corporate Transparency Act, which requires corporations and limited liability companies (LLCs) with 20 or fewer full-time employees to file new reports with the Treasury Department’s FinCEN bureau containing the personally identifiable information of small business owners.
The Treasury Department estimates the proposed rules to implement the Corporate Transparency Act will require more than 25 million existing small businesses to spend an aggregate of more than $4 billion to submit personal data reports to the Financial Crimes Enforcement Network (FinCEN). In reality, the compliance costs are likely to be substantially higher.
Take action and urge your Member of Congress to cosponsor H.R. 7623.