WASHINGTON, D.C.— Today, the House Financial Services Committee, led by Chairman Patrick McHenry (NC-10), is holding a hearing with Treasury Department officials from the Financial Crimes Enforcement Network (FinCEN) and the Office of Terrorism and Financial Intelligence (TFI). Republicans are conducting oversight of FinCEN and TFI, including implementation of the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting regime. The Biden Administration has added unnecessary complexity and confusion to the reporting regime—burdening small businesses and potentially risking U.S. national security.
Watch Chairman McHenry’s opening remarks here.
Read Chairman McHenry’s opening remarks as prepared for delivery:
“Welcome, Undersecretary Nelson and Director Gacki.
“More than four years ago, Republicans worked in good faith with our colleagues on the other side of the aisle to pass the Corporate Transparency Act, or CTA.
“With the CTA, Congress intended to enhance our national security by preventing bad actors—like China, Russia, and Iran—from using the financial system for illicit purposes. We did so by creating a new beneficial ownership reporting regime.
“This reporting regime was supposed to rid the financial system of bad actors by going after the shell companies often used by foreign adversaries to hide the proceeds of trafficking and terror financing.
“Throughout the process, Republicans were clear. Our national security tools must be balanced with the protection of small business owners’ privacy rights.
“Republicans fought for, and secured, key provisions to ensure the burdens imposed on small businesses were limited and beneficial ownership information is protected just like tax returns.
“However, the Biden Administration has failed to implement Congress’ intent. It has added unnecessary complexity and confusion to the reporting regime—potentially risking our national security.
“The Administration has transformed what was a simple and direct program into Frankenstein’s monster of complexity.
“For example, the CTA required four pieces of information from people who are reporting as beneficial owners. The filing form now consists of 51 data points.
“Additionally, Republicans secured the strongest privacy and disclosure protections ever for America’s small businesses. We fought for guardrails on the collection, maintenance, and disclosure of beneficial ownership information.
“Instead of adhering to the bipartisan agreement and treating this sensitive data just like tax information, the Biden Administration opted to completely reinvent the wheel. We now have a new, overly complex, and less secure access regime.
“Finally, it’s unclear what Treasury and FinCEN are doing to communicate key compliance and process information to impacted small businesses. This is the opposite of transparency.
“Every single small business in America will be forced to comply with this regime. Yet, 90% don’t know they have new reporting responsibilities, according to a recent survey by the NFIB.
“Republicans have been sounding the alarm for years about the Biden Administration’s failed implementation of the CTA.
“This Committee has advanced several bills to deliver much needed transparency and accountability to FinCEN, while bringing these rulemakings closer to Congressional intent.
“We all agree, to protect national security we must prevent foreign adversaries from using our financial system for illicit purposes. FinCEN has a critical role in achieving this goal and Congress has already granted the agency tremendous power to that end.
“We were told that the beneficial ownership reporting regime would be the silver bullet FinCEN needed to catch and deter bad actors. Yet even after enactment, we have been inundated with never-ending requests for new authorities and more money.
“Now we see reports indicating the agency may be abusing its existing authority. According to these reports, law abiding American citizens are being targeted by FinCEN because they have differing political views from the White House. This is unacceptable.
“Until FinCEN can show Congress it can do its current job and appropriately use its existing authorities, I’m skeptical of providing greater authorities and resources.
“FinCEN is one of the least known but most powerful agencies in the entire federal bureaucracy. But when Congress gives you an inch, you don’t get to take a mile.”
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