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House Financial Committee Looks To Overhaul FinCEN As It Questions Data Security Featured

House Financial Services Committee chairman Patrick McHenry introduced a pair of bills aimed at improving transparency of the Financial Crimes Enforcement Network (FinCEN) as it expressed serious concerns about consumer data security and seeks to overhaul the Department of the Treasury bureau.

The two bills, the Protecting Small Business Information Act and the Accountability Through Confirmation Act, are set to reform the enforcement network by redesigning its leadership procedures and restructuring certain reporting requirements for small businesses, according to an announcement from McHenry’s office. “The degree of regulatory authority and volume of Americans’ sensitive information amassed by FinCEN would make the Intelligence Community blush,” McHenry said in a statement. “They have done this with little transparency and accountability, and a disregard for Americans’ privacy rights.”

FinCEN is tasked with protecting the U.S. financial system, including the crypto space, from illicit activities like money laundering and is tasked with bolstering national security by collecting, analyzing and disseminating financial intel and levering the strategic use of other financial authorities. “In response, Republicans on the House Financial Services Committee are working to comprehensively reform the agency. As part of that effort, I am introducing two bills to boost transparency at FinCEN and ensure it is accountable to the American people. I’m proud to stand with my colleagues to fight back against government overreach and protect the privacy of our constituents,” McHenry adds.

From Twitter

HilesFiles @MichaelHiles ·Jun 12

"U.S. banks and permissionless public blockchain networks aren’t going to happen for the foreseeable future. While the SEC is well down the road on enforcement (for better or worse), OFAC and FinCEN haven’t even turned over the engine yet."

Recently, FinCEN Acting Director Himamauli Das testified before McHenry’s Financial Services Committee. During the Thursday, April 27, meeting, Das specifically addressed the need for strong data protection measures.

“One of the greatest responsibilities we have to the American people is to diligently protect the sensitive data that the [Bank Secrecy Act] requires financial institutions and others to report to FinCEN,” Das says. “Ensuring that Congress and the public have faith in our ability to safeguard this data is foundational to our overall efforts to protect the integrity of the financial system from abuse by illicit actors.”

Part of FinCEN’s work and responsibilities include providing access to data for government officials and law enforcement at every level of government using its FinCEN Query system. As part of a broader effort to improve its data security, FinCEN has begun the process to implement several recommendations derived by the Department of the Treasury.

Specifically, McHenry’s proposed legislation will require the director of FinCEN to be appointed directly by the president, rather than the Secretary of the Treasury, and require Senate input. A separate bill delays certain reporting requirements that would have been due Monday, Jan. 1, for business entities. “This legislation builds on Chairman McHenry’s work to ensure that beneficial ownership rulemaking adheres to Congressional intent, ensuring reporting companies cannot avoid transparency and preventing FinCEN from instituting an overly burdensome compliance regime on small businesses or infringing on Americans’ privacy rights” reads the announcement.

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