The House Financial Services Committee today advanced legislation that would increase congressional oversight of the Financial Crimes Enforcement Network and prohibit the Federal Reserve from issuing a central bank digital currency. In a memo to committee members, the American Bankers Association weighed in on several bills, expressing support for more FinCEN oversight and highlighting banker concerns about a CBDC.
Among the bills passed out of committee was legislation to require the Treasury Department to keep the House Financial Services Committee and Senate Banking Committee regularly informed about significant or unlawful FinCEN activities. The committee also advanced a bill to require FinCEN to identify the number of Bank Secrecy Act reports filed by financial institutions with FinCEN, by type. In its comments, ABA said the latter bill, H.R. 5485, would help banks understand the protection and use of highly sensitive BSA reports by law enforcement and intelligence agencies. “Overall, it will bring a much-needed measure of accountability to the BSA process,” the association said. The committee also advanced ABA-supported legislation to extend the deadline for the pilot program authorizing suspicious activity report sharing with foreign affiliates from Jan. 1, 2024, to three years after the date the program begins.
The committee was divided along partisan lines over legislation seeking to rein in the Fed’s ability to issue a CBDC, with Republicans supporting the measure and Democrats opposed. Ultimately the committee passed a bill that would prohibit the Federal Reserve from issuing a central bank digital currency or offering products or services directly to an individual. Further, the bill establishes that a CBDC can only be authorized by Congress. ABA supported the measure, H.R. 5403, reiterating its position that a retail CBDC is unnecessary and would present unacceptable risks and costs to the financial system.
