U.S. Financial Services Committee examines anti-money laundering modernization with focus on technology and reporting reform

In a congressional hearing, the U.S. Financial Services Committee’s Subcommittee on National Security, Illicit Finance, and International Financial Institutions examined how Congress could modernize the U.S. anti-money laundering framework. Members and witnesses focused on using technology to improve compliance and customer privacy, and on whether current Bank Secrecy Act requirements and FinCEN’s proposed anti-money laundering program changes would shift banks away from high-volume reporting toward more targeted financial crime controls. Discussion centered on reforming Suspicious Activity Report and Currency Transaction Report requirements, which witnesses said generate excessive low-value filings because thresholds are too low and examiner expectations are overly punitive. Members also raised duplication in customer information collection, including repeated onboarding for existing customers opening additional accounts. Witnesses argued that FinCEN has not yet provided the effectiveness data Congress required under the Anti-Money Laundering Act of 2020, limiting the basis for further reform, and pointed to weak feedback on beneficial ownership and other reporting. Testimony also warned that authoritarian regimes, criminal networks, and other bad actors are exploiting AML loopholes and new technologies, including artificial intelligence, faster than existing legal frameworks are adapting.