▶ 0:08:48International Finance Financial Institutions will come to order. Without objection, the chairman is authorized to declare a recess of the committee at any time. This hearing is titled Evaluating the Financial Crimes Enforcement Network. Without objection, all members will have five legislative days within which to submit extraneous materials for inclusion in the record. I now recognize myself for four minutes for an opening statement.
▶ 0:09:10This is the third hearing with the director of fencen as required by section 5 5336 C11 of the corporate transparency act. Today provides a public forum to examine fencen's operations uh the troubled status of the beneficial ownership information reporting regime and a money laundering act of 2020 and the history and impact of the bank secrecy act. The goal of this hearing is to assess these tools for targeted reforms that enhance security without trampling on privacy and innovation.
▶ 0:09:41This testimony should help Congress assess how these frameworks target real threats like terrorist and cartel financing networks, scam centers, and other illicit finance. The big questions, how to do it all without avoid while avoiding surveillance of law-abiding Americans and small businesses. The Bank Secrecy Act was enacted in 1970 with a narrow good intention to create transparency against organized crimes infiltration of our financial system.
▶ 0:10:09Over decades, the BSA has morphed into a bloated surveillance machine demanding endless reports from banks, businesses, and individuals without delivering proportional results. today. Uh, this is this framework's dangerously outdated and the BSA's one-sizefits-all mandates are tying up lots of resources. Are they being used effectively?
▶ 0:10:32In recent years, the Bank Secrecy Act, corporate transparency act, anti-moneyaundering act of 2020 have proven sometimes ineffective, but always cumbersome. For example, Fen's own data data shows that from 2014 to 2023, law enforcement agencies only accessed about 5.4% of the millions of currency transaction reports filed under the Bank Secrecy Act, highlighting how this flood of paperwork burries real leads in bureaucracy instead
▶ 0:11:03of focusing on bad actors. And on the CT uh CTA front, we've seen fencen issue over broad rules that treat every mom and pop shop around the country uh as potential money launderers, forcing disclosure of personally identifiable information into a federal database that isn't well safeguarded against tax or misuse. That's not security. That's an invitation for abuse. And we've witnessed it in pre in other cases like Operation Chokepoint.
▶ 0:11:31While millions of American businesses are relieved by March's delay uh delayed enforcement of corporate transparency acts beneficial ownership mandates, um they await clear guidance from S fins about what the future looks like. We appreciate the uh interim rule and we're happy to work to finalize it. We are in fact working on a law to cement it, but um the market really wants clarity and certainty on where things are headed.
▶ 0:12:00Meanwhile, true threat threats like Chinese fentanyl cartels uh laundering are laundering billions through US real estate or Russian oligarchs or sometimes evading sanctions. Uh they slip through because resources are tied up with uh collection rather than analysis. We need to uh index outdated CTR thresholds for inflation.
▶ 0:12:23We should codify the full repeal of CTA's beneficial ownership mandate on US businesses and focus it on external threats. This hearing is our chance to demand accountability. With that, I yield the balance of my time. And I now recognize the ranking member of the subcommittee, Miss Batty, for four minutes for her opening statement.
▶ 0:12:43Thank you, Mr. Chairman, and certainly uh thank you for being here, Director Gaki. you're going to have a lot coming at you today as our only witness uh sitting up there. And I think you should take that as because you have so much experience.
▶ 0:12:57you have worked through uh President Trump's administration, President Biden's administration, and so we're hoping that today's hearing will shed light on the national security consequences if we uh your office and our financial crime programs because one thing I can tell you is that we all are against corruption.
▶ 0:13:23uh no one wants to be engaged sitting on this committee uh by the very nature of the title uh that my Republican colleagues have named it. So uh I am very anxious uh to hear from uh you today.
▶ 0:13:39So, we know that the financial crime enforcement network is small, but it is a vital a vital importance in a bureau bureau at the Treasury Department that is tasked with protecting our financial system from traffickers, from money launderers, from terrorist facilitators, and other bad actors. To put this work in perspective, let's look, for example, at something that we've all been engaged with on both sides of the aisle, and that's elicit fentanyl.
▶ 0:14:10That trade that has devastated our communities over the last decade, and I can say as well as I'm sure our chairman will because we're both from Ohio and what has happened uh in our districts. Finan follows the money to the origins of these drug supply chains to disrupt finance streams uh wherever it can. hopefully preventing synthetic opioids like fentanyl uh from entering uh our country.
▶ 0:14:36When my constituents ask me what we're doing in Congress to stop fentanyl deaths and protect our communities, I tell them about the important work that we do on this committee to make it tougher, to make it less profitable for drug traffickers and to uh to conduct their crimes and fins is central to that effort. And thank you. Given that, Director Gaki, I am proud of the work that we've done in recent years to bolster our national security and crack down on financial crime.
▶ 0:15:07However, today's hearing, our first Vincent oversight hearing since the administration's change, comes in the wake of a series of dangerous roll backs in our illicit finance regulatory framework. And just to name a few, the Trump administration has endeavored to unlawfully eliminate the Consumer Financial Protection Bureau, the agency responsible for protecting Americans from fraud and abuse.
▶ 0:15:32The president has changed the way the United States enforces the Foreign Corrupt Practices Act, which prohibits Americans from bringing bribing foreign officials. And perhaps the most alarming of all, Treasury Secretary Scott set gutted the bipartisan corporate transparency act, which President Trump signed into law during his first term, exempting over 99% of the companies that Congress intended the law to cover.
▶ 0:16:02This stunning reversal eliminates a critical new tool for law enforcement to unmask anonymous shell companies, effectively making the United States the preferred haven for money laundering, traffickers, and fraudsters.
▶ 0:16:18Instead of working with Congress to make key reforms to the law that would ease small business compliance concern, the administration chose to directly ignore the law as it was passed and intended to be implemented by a strong bipartisan Congress. Further, these recent actions threatens our national security, weakens our efforts to fight money laundering and the finance of terrorism, and gives us fewer tools to protect hardworking Americans.
▶ 0:16:47So, good luck today and we're excited to hear from you. I yield back.
▶ 0:16:52Thank you. I now recognize the chairman of the full committee, Mr. Hill, for one minute for an opening statement.
▶ 0:16:57Thank you, Mr. Chairman. I want to thank uh Finson Director Gaki for joining us today. It's good to see you. Glad to have you back before the committee. Finen plays a crucial role in safeguarding our nation's financial system from illicit activity. Today's hearing will give committee members the opportunity to hear from and question the Fininsson director on the AY's operations, including the current status as noted by the ranking member of the beneficial ownership reporting rule and other efforts to fight financial crime.
▶ 0:17:27I was pleased to see Treasury's interim rule issued in March exempting US companies from beneficial ownership reporting requirements. It marks an important step towards easing regulatory burdens on some 32 million hardworking uh American small business people nationwide and I look forward to learning more about the forthcoming rule.
▶ 0:17:47We will also assess the Bank Secrecy Act's performance over the past five decades and explore ways to modernize it and ensure it remains effective in protecting our national security. I look forward to the hearing and I yield back.
▶ 0:18:01Thank you, Chairman. I now recognize the ranking member of the full committee, Miss Waters, for one minute for an opening statement.
▶ 0:18:08Thank you, Chairman Davidson, and ranking member Batty. While I'm pleased to welcome back Dictor uh Director Glock, I'm disappointed we're not more closely reviewing the Trump administration's and congressional Republicans actions that weaken America's capacity to stop money laundering and fraud.
▶ 0:18:31Today, American consumers are less protected from fraud and corruption thanks to Trump's closure of agencies like the Consumer Financial Protection Bureau. Today, America is less secure thanks to Trump's firing of government examiners, investigators, prosecutors, and inspectors general.
▶ 0:18:53And drug and human traffickers will thrive due to the GOP's gutting of crime fighting tools like the Corporate Transparency Act and the Investment Advisors Rule. If we really want to stop fraud, we shouldn't eliminate the very government workers who are charged with doing so. I yel back.
▶ 0:19:15Thank the ranking member. Today, we welcome the testimony of Miss Andrea Gaki, director of the Financial Crimes Enforcement Network. Uh thank you for taking your time to be here. Uh you will be recognized for five minutes to give oral presentation of your testimony. Without objection, your written statement will be made part of the record. Miss Gaki, you're now recognized for five minutes for your oral
▶ 0:19:36Thank you, Chairman Davidson, Ranking Member Batty, Chair Hill, Ranking Member Waters, and distinguished members of this subcommittee. I thank you for the opportunity to testify here today on behalf of the Financial Crimes Enforcement Network or Fininsen. I want to say at the outset how much I appreciate the support of Congress and of this subcommittee in general in our collective efforts to combat illicit financial activity.
▶ 0:20:02Today I plan to discuss how Fininsson has leveraged our tools to advance this administration's highest national security and law enforcement priorities to ultimately protect the lives and livelihoods of the American people. First, Fininsen is deploying our resources against a number of threat priorities, including countering cartels and drug trafficking, imposing maximum pressure on Iran, fighting child sexual exploitation, and combating fraud.
▶ 0:20:32In these remarks today, I want to focus a bit on our efforts to counter cartels and drug trafficking. In one of his first executive orders, President Trump established a policy of ensuring the total elimination of terrorist designated cartels in the United States.
▶ 0:20:49To implement this policy this past June, pursuant to the Fentinel Sanctions Act, Fininsen identified three Mexico-based financial institutions as being of primary moneyaundering concern in connection with illicit opioid trafficking. Sinsen also issued alerts to financial institutions targeting bulk cash smuggling by Mexico-based transnational criminal organizations as well as oil smuggling schemes along the southwest border associated with Mexico-based cartels.
▶ 0:21:17We also published two comprehensive public financial trend analyses. One on finan on fentinel related illicit finance and one on the key role of Chinese moneyaundering networks to promote disruption of key vectors of illicit finance. And we have leveraged these publications in public private partnerships in the fight against cartel finance. In June, we convened two Fininsen exchange events along the southwest border in Texas focused on combating money movements associated with drug trafficking organizations.
▶ 0:21:48And this week, Fininsen and our Treasury colleagues are convening in here in DC a crossber dialogue together with the government of Mexico, the largest Mexican banks and US correspondent banks to further efforts to eliminate Mexico-based drug cartels on both sides of the border.
▶ 0:22:06Next, Vincen is focused on efforts to streamline regulatory requirements and reduce industry compliance burdens, including through further implementation of the anti-moneyaundering act of 2020 so that the AML CFT regime in the United States is riskbased and focused on the greatest threats to financial institutions and to national security.
▶ 0:22:28One key aspect of modernizing the Bank Secrecy Act regime involves reporting, especially suspicious activity reports or SARS and currency transaction reports or CTRs. SARS and CTRs can provide critical information to law enforcement partners. However, Fininsen recognizes the burden this reporting imposes on institutions and individuals.
▶ 0:22:51We're currently exploring ways to streamline SAR and CTR reporting, including by improving the forms, which will be beneficial for law enforcement and national security data users, as well as for filers. And to further reduce the regulatory burden on US companies and US persons, Vincen modified our approach to beneficial ownership information, which I look forward to discussing in this Fininsen is reviewing comments on the interim final rule issued this past March, and we intend to issue a final rule this
▶ 0:23:21upcoming year. Finally, let me highlight Fininsen's efforts to promote the administration's goal of supporting the responsible growth in use of digital assets. Digital assets, like other financial assets, are subject to misuse by illicit actors. To unleash the full potential of digital assets in the United States, certain measures should be adopted to deter elicit finance and combat financial crime that targets Americans.
▶ 0:23:49Faithfully and expeditiously implementing the Genius Act is one of those measures. As Fininsend initiates reg rulemaking efforts necessary to implement the Genius Acts required regulations, we'll continue our ongoing engagements with the digital asset industry and with law enforcement. And we also look forward to engaging with uh financial services committee members as Congress considers further legislation in this area.
▶ 0:24:15Thank you again to this committee for your support and partnership in combating illicit finance and I look forward to your questions. Thank you, Director Gaki. We'll now turn to member questions, and I recognize myself for five minutes for questioning.
▶ 0:24:31Uh, Director Gaki, in your very thorough opening statement and written testimony, I appreciate that you highlight uh your efforts uh and the efforts of Finen to counter cartels to counter Iran and other threats to the United States to confront human sex child trafficking to look at uh scam centers that are exploiting our seniors in particular and to modernize your tools uh that you're using both internally and also responded to the market in an era where digital assets have the opportunity
▶ 0:25:01to thrive and people are also finding ways to use those as they have every other form of payment for elicit finance. So, thank you for your work and I appreciate your openness to some reforms on how to be more effective in that. And I want to highlight one of those is the beneficial ownership disclosure because it seems that you've made a decision to be frankly to focus on collecting information about US citizens differently than you collect about non-citizens.
▶ 0:25:29And I think that's important because our constitution limits the ability to presume that someone's guilty of a crime. You supposed to have probable cause u and and a warrant to get some information. Beneficial ownership uh as drafted in the previous administration. Basically assumed every business was engaged in illicit finance and they had to provide collected material. I think it's unconstitutional. But as the courts fight this out, you've stepped in.
▶ 0:25:58So, could you give us an update on progress towards that and what issues would be helpful for Congress to clarify?
▶ 0:26:07Thank you, Chair Davidson, for your um question. And I also wanted to um recognize the letter that you and other members and um senators sent to Secretary Bessant yesterday on the corporate transparency act and the way forward. Um and wanted to stress that the March 20 uh 20 uh 2025 interim final rule that Fininsen issued um took a different approach and consistent with administration priorities.
▶ 0:26:36As a career civil servant, I have served across administrations and I'm proud of my track record in implementing presidential policy. Um and the presidential policy changed with respect to uh the corporate transparency act focusing and making sure that the burdens on 30 plus million uh small businesses were taken into account and so Fininsen adjusted the uh reporting structure for the interim final rule in this past March and open it up for questions.
▶ 0:27:06The present rule uh requires reports from foreign reporting companies that are not subject to um any exemptions uh and they are required only to report foreign beneficial owners. We intend to finalize this rule in the upcoming year.
▶ 0:27:24That's our public commitment and we're working through administration um making sure we have administration guidance in um and working through the number of comments that we received um to the interim final rule and along with the resolution of the rule. We intend to resolve uh questions around the data that we gained and uh dispose of data that is no longer legally required to be filed.
▶ 0:27:53So, we look forward to concluding that this
▶ 0:27:55Yep. Thank you. And I'll uh ask without objection unanimous consent to submit the letter that I sent to uh Secretary Bessant and others uh directing as as addressed. So, thank you for addressing that and look forward to your answer and working with you to get the law to match what the administration's intent is. And I appreciate the effort uh your effort and Fenson's efforts to align there.
▶ 0:28:19Um, I'd also like to ask unanimous consent uh without objection to submit uh for the record a press release from uh the judiciary committee on fraud. It's titled fraud on act blue. New report details potential illegal activity on the Democrat fundraising platform uh from April 2nd, 2025.
▶ 0:28:40This is an example of um you know financial crime uh where people are being attributed to have given substantial sums of money uh and then when they're interviewed that they don't even have that kind of money. They're not giving it and the question is where's that money coming from? Uh can you comment on that ongoing
▶ 0:29:02Thank you Chair Davidson. I know that my team is actively working with members in Congress to review our data um to um ensure that we are providing um up-to-date information on that ongoing investigation into
▶ 0:29:16Are you working with the Department of Justice on it?
▶ 0:29:18Uh we're working with um congressional oversight committees looking at.
▶ 0:29:21So at this point DOJ's uh inactive
▶ 0:29:24uh I'm sorry I don't have I do not know the status of DOJ's um
▶ 0:29:28but they're not active with fencing. Well, DOJ has access to our data
▶ 0:29:33and and they um they uh are able to uh view it con, you know, um consistent with the um with the protections we have in place and um I defer to them on their
▶ 0:29:45Thank you. My time has expired. I now recognize the ranking member of the subcommittee, Miss Batty from Ohio, for five minutes.
▶ 0:29:52Uh thank you, uh Mr. Mr. Chairman, and thank you for that response to the chairman's last uh question about the investigation with Act Blue. We know investigations, whether it's ACT Blue or the Epstein fouls, go both ways uh with what we're looking at and what we read uh in in articles and I note that uh we are moving forward uh looking at the Epstein files as well. But that's an aside.
▶ 0:30:17Uh let me say thank you again because last year I had the distinct honor of having you in my uh district with former under secretary uh Nelson for our small business information session on the beneficial ownership uh rule. At that event we talked at great length uh about how critical this information is to law enforcement and many of them were present in our AML CFT regime.
▶ 0:30:44Let's fast forward to March of this year and the Trump administration has done a total about face violating the clear intent of the Congress to include domestic companies that are not otherwise exempt from the law. In my opinion, uh they were included because in fact there had been crime with the domestic uh companies.
▶ 0:31:06Uh, Director Gaki, we applaud you for working across all lines, but my question is, do you still agree that domestic companies could present a money laundering risk? Ranking member Batty, thank you so much for that excellent question. I want to thank you for welcoming me to your district last year. Um, it was a um, terrific experience to get to interact with your constituents.
▶ 0:31:29And I do want to um I do want to step back and and reiterate that as a um as a career civil servant working across administrations, I will implement the policy of the administration as it um as it uh as it applies to beneficial ownership information. And um I I would say for uh the current administration has taken a look at the um reporting structure and assessed that the burdens on small business fell too greatly.
▶ 0:31:59It needed to be alleviated and that is what Fininsen did through the interim final rule. However, as you point out, there are still instances where domestic um uh shell companies can be leveraged in financial crime. And there I can point to other sources of information that can help law enforcement if the beneficial ownership information uh regime is not being uh used.
▶ 0:32:27Um for example uh Fininsen's customer due diligence uh rule on financial institutions does require collection of information um at the um point at which um uh accounts are opened and financial transactions and financial accounts are usually critical to all forms of shell companies in the United States. That being said, we will be carefully reviewing the qu the responses to our interim final rule to see if any adjustments need to make uh need to take place.
▶ 0:32:57As this is an ongoing open rule making, I can't um I can't uh discuss the ultimate resolution of that. But um I look we look forward to reviewing all comments on all sides of the beneficial ownership uh issue.
▶ 0:33:12Thank you. Then let me make this comment uh and I'll phrase it versus in a question to what I believe. I believe that it is accurate to say that the Treasury's recent decision to exclude domestic reporting companies from enforcement exents the vast majority I believe roughly 99% of covered entities from the reporting uh rule.
▶ 0:33:33Also, I believe that therefore this decision to exempt US companies makes it easier for fentanyl traffickers and other criminals to launder money through the United States um endangering the safety of our constituents. Don't want to put you on the spot. There are many who believe that. We have records to show from drug trafficking coming into uh Ohio and across uh many of our highways.
▶ 0:34:01Uh so let me just say that I'm going to continue uh to be an advocate against illicit crimes. And if that means us doing due diligence of asking for information about who owns a business, uh I'm a business owner. Uh you would have no reason in supplying the information.
▶ 0:34:21And I suggest to some of my colleagues if they pull up the form and look at the questions that are being asked, they appear to me to be standard questions that any business doing good business, legal business uh should want to do. And thank you and I yield back.
▶ 0:34:39Thank you.
▶ 0:34:39Thank the ranking member. The gentleman from Arkansas, the chairman of the full committee, Mr. Hill, is now recognized for five minutes.
▶ 0:34:46Thank you, chairman. uh both before and after the passage of the corporate transparency act back in 2021. I spent a lot of time advocating for alternatives to the rulem that was taken and even the statutory language that the Congress agreed to in an NDAA amendment that includes debating vigorously with former Ways and Means Chair uh Brady and former Treasury Secretary Minutuchin.
▶ 0:35:14I've advocated where isn't there a better way instead of creating a new database that can be breached, hacked, collecting more information that can only be filed online for 32 million small businesses. Every heating and uh owner out there with the truck and three employees is going to be captured by this, for example.
▶ 0:35:36And while I, as I noted in my opening comments, the March interim rule was was helpful, I think there's a better way, which is simply using the existing form 1065, which every pass through entity has to file, and the resulting K1s that are issued. And let me say in front of the whole committee, why was that not treated as a real possibility?
▶ 0:35:59Number one, uh, the Ways and Means Committee said and the Treasury said, "We just don't want any more exceptions to sharing IRS data." Well, there are 35 or so now. And if this is such a national security essential element, why wouldn't this be a worthy additional sharing? Under CTA, companies are required to report four key pieces of information. Full legal name, date of birth, current address, and a unique identifier.
▶ 0:36:29And of course, that's all available except for the birth date, which I think we can figure out. I believe we have open source data on everybody's birthday. Uh we'll refer the Fininsson to Facebook for that if you need help on that. But I really think that this is a better approach. You don't have to express an opinion on it. you're implementing the law. I got it.
▶ 0:36:52But I think this is a good opportunity to illustrate we never ever really tried to minimize the cost of 32 million people. Wouldn't you agree though that this would be an easier way to use data that the federal government already has legal access to? Chair Hill, thank you so much for that question and those excellent points and um I um I appreciate your um focus on this issue.
▶ 0:37:18Um, and I think that the idea that the that the um congressional and executive branches should look at existing pools of data and determine how best to use those in the first instance is very well taken and I look forward to working with Treasury leadership on this particular issue to explore whether this is a possibility.
▶ 0:37:43Thank you for that. Let me switch subjects to the important one of geographic targeting orders which has been actually a big successful strategy of Finson for many decades and was actually tackling the issue of shell companies and people hiding assets. Uh but there's been a recent change which is that there's a new nationwide rule as opposed to a limited geography requiring real estate professionals to report all non-finance purchases of real estate.
▶ 0:38:12And according to Finson's estimates, the real estate industry is expect to bear over $630 million in compliance costs or about $600 per report filed based on some 850,000 transactions a year.
▶ 0:38:30Um based on our years of experience with geographic targeting, what's your how do you justify that cost related to the actual crime I mean law enforcement goals being objected obtained I should
▶ 0:38:46Thank you Chair Hill. And I think you know to the point we have been Fininsen has been issuing using the the tool of the geographic targeting order for 10 years um across administrations um to seek information on shell companies entity legal entities purchasing real estate in a non- financed way.
▶ 0:39:07And the the thing about the geographic targeting order is it's a temporary measure that can only be renewed if there is a law enforcement need for that information. And across 10 years, we have seen an incredible thirst among law enforcement for this information and this information being used in active and successful law enforcement prosecutions.
▶ 0:39:30And that drove the decision uh to make what was a temporary measure into a permanent measure widely applicable um to be the residential real estate rule which is scheduled to come into effect um in December um 2025. We do think the benefits of this data
▶ 0:39:48if you could provide me some of that information uh in writing and then also the results of the law enforcement successes in the past decade that would be helpful and I yield back Mr. Chairman. Thank you, chairman. A gentleoman from California, the ranking member of the full committee, Miss Waters, is now recognized for five
▶ 0:40:06Thank you very much, uh, Director Ger. Last month, your agency, Finson, sounded the alarm on Chinese money laundering networks. In more than a dozen examples, you warned that these organizations use US and foreign corporate structures to hide launder money, park assets, and repatriate the illicit funds from criminal activities, including human trafficking and smuggling across and beyond the
▶ 0:40:36southwest border. Yes or no? Was under secretary of treasury for terrorism and financial intelligence, John F. Hurley, John K. Hurley, correct when he stated on the documents released that the Chinese money laundering network enable cartels to quote poison Americans with fentinol conduct, human trafficking and wreck havoc among communities across our great
▶ 0:41:06nation.
▶ 0:41:08Yes, ma'am. When Under Secretary Hurley said that question um said that statement, um we have seen Chinese moneyaundering networks uh to be um a prevalent form of money laundering that are increasingly being leveraged in by cartels um uh to um to facilitate um narcotics trafficking.
▶ 0:41:32Um it is a way it is leveraging uh it is taking advantage of laws both in Mexico and in the People's Republic of China against um funds flows out of those countries or into those countries of US dollars and there is an informal decentralized network being leveraged by cartels to launder the the launder the sums being used uh that uh to export narcotics and other drugs to the United States.
▶ 0:42:03Thank you for that. Um, I want to move on uh to some work that I've been doing on the Caribbean on de-risisking. uh in 2023 is required by the anti-moneyaundering act of 2020.
▶ 0:42:17The Treasury Department released its US uh de-risisking strategy having worked for years uh with those most heavily impacted by de-risking, including many Caribbean nations and territories that are effectively cut off from the international banking community. I was pleased to see the release of this strategy.
▶ 0:42:37Its important was underscored at a 2022 hearing that I chaired where Prime Minister Mia Amore Mley of Barbados gave historic testimony about the negative effects of de-risisking on the people and businesses in the region. The Treasury strategy recommended several follow-up actions including a joint study by the Federal Banking Agency in Fininsen, revision of uh money service business oversight standards and improvement of international cooperation.
▶ 0:43:07Can you please elaborate on what exactly Finson and partner Treasury offices have done to pursue the steps laid out in the strategy? What does your agency have planned for the next year related to de-risisking, especially in the Caribbean region, especially related to access to correspondent uh banking
▶ 0:43:28Ranking member Waters, thank you for um that question and for your long-standing interest in um this issue. I want to assure you that since the since the president issued an executive order this past August guaranteeing fair banking for all Americans, Treasury is uh working to implement the president's um executive order to guarantee that for all Americans.
▶ 0:43:50But beyond that, for many years, uh Fininsen has noted that its policies should not equate to the de-risking of uh populations. So, I want to focus on Fininsen's work here and the broad uh in the broader um on the broader Treasury response to de-risisking. I look forward to um getting back to you and your staff on that.
▶ 0:44:12But as Vinzen noticed in a statement on customer due diligence issued by Fininsen and the Federal Banking agencies, banks that operate in compliance with their Bank Secrecy Act obligations and effectively mitigate and manage their illicit finance risks are not prohibited or discouraged from providing banking customers uh of any specific class or type. and I look forward to working with our federal banking agency colleagues to further clarify that as needed.
▶ 0:44:43Uh thank you. I'm just interested in followup uh to see if changes should be made based on a longtime policy uh what kind of factual information is being used in u examining this risking issue. Absolutely. We'll get back to you on
▶ 0:45:12Thank the ranking member. The gentleman from Oklahoma is the chairman of the monetary policy task force. Mr. Lucas is recognized for five minutes.
▶ 0:45:20Thank you for holding this hearing, Mr. Chairman. And thank you, Director Gaki, for testifying today. Director Gaki, fraud in our financial service system continues to be one of the top burdens facing my home state. Can you detail Fininsson's approach to dealing with this problem? Uh the folks back home want to see some more progress.
▶ 0:45:42Thank you, Representative Lucas. Um this is um a huge issue for us at Fininsson and across the Treasury Department. And in fact, in many moneyaundering risk assessments facing the United States, uh fraud is the crime. it is the highest uh generating revenue generating crime that features money laundering and this has been proven time and again and it's growing at an exorbitant pace.
▶ 0:46:08So Fininsen is this is one of the key areas that Fininsen is dedicated to and let me outline a few um things that we're doing on this. Um first we're we're trying to educate financial institutions as to markers of fraud so that they can be on the front end deterring this and stopping this. We've issued financial trend analyses, for example, on elder financial exploitation.
▶ 0:46:30Um, a few um just earlier this past summer, we issued an alert on um the abuse of um uh basically um of uh convertible virtual currency kiosks and how they can be used in um elder or in any financial exploitations. Just yesterday, we issued an alert on um the troubling pattern of extortion, a very specific type of fraud.
▶ 0:46:57Not only are we focused on different um fraud typologies and making sure financial institutions are tracking that, but we're also actively working on repatriating funds that are taken by by means of fraud. Vincent has an active program called the rapid response program that focuses on uh fraud, the fraud typology of business email compromise.
▶ 0:47:21And we work closely with the FBI and with Secret Service and IRS uh criminal investigations where we can work through international counterparts to freeze or repatriate uh funds taken from Americans and brought um overseas. Since the inception of that program, we have repatriated over a billion dollars.
▶ 0:47:45And this is um this is a um incredible um program that we look forward to building and developing to bring really meaningful action to ordinary Americans. And then finally, I just want to note um the day-to-day, everyday case support we do for fraud investigations across the United States at every level of law enforcement, state, local, federal um to make sure that Americans um are getting the help they need uh to stop uh these
▶ 0:48:16vectors of fraud.
▶ 0:48:17Director, I'd like to follow up on that question. Part of the problem seems to be that fencen is overwhelmed with data sometimes in material data that dilutes the helpful information the agency could use. Have you considered focusing reporting obligations so that Finson only receives relevant information for law enforcement investigations?
▶ 0:48:38Thank you, Representative Lucas. And this is I think a broader um part of modernizing the bank secrecy act regime. Um and very much um one key element of that is making sure that um financial institutions um AMLCFT programs are consistent with the law that they are effective and riskbased that and that they are producing information that is valid to law enforcement.
▶ 0:49:06We are in the midst of um a a um a treasurywide exploration of how to reform the bank secrecy act regime in the United States. And one part of that is a key part of that is reporting including suspicious activity reports and currency transaction reports. We should be collecting uh information that is truly important to um law enforcement and national security.
▶ 0:49:32And to the extent that requires adjustments of the types of information that we ask for to simplify the forms and the thresholds, we are actively exploring that and hoping to bring it to conclusion as soon as possible.
▶ 0:49:45Let me simply note that it looks as though Finen has increased the administrative burdens on small business and credit providers in many ways without seeing results. simply suggests that a targeted approach might allow for better outcomes and a more enthusiastic support from the providers of that information. And with that, I yield back, Mr. Chairman.
▶ 0:50:06Thank you, Chairman. The gentleman from California, who's the ranking member of the Monetary Policy Task Force, Mr. Vargas, is now recognized for five
▶ 0:50:15Thank you very much, Mr. Chairman. And again, I want to thank you for conducting this hearing and thanking the ranking member and of course the director. Mr. Chairman, at the beginning, you talked about the surveillance machine. It really caught my attention because I think that generally falls within the perspective or ideology of a lot of my friends on the Republican side that government should be limited, that we shouldn't have the intrusion of government in our private lives, that that there has to be a balance.
▶ 0:50:46and and I normally fall on the side of saying, you know, government is is generally good and it's very supportive of government in general, but I have to say it's been fascinating to see under this administration how incredibly intrusive the government has grown not only into our private lives but interestingly now into business.
▶ 0:51:11I mean we see government now positions in individual companies and that used to be called socialism. It used to be called, you know, entities owned by the government. I understand we have GSC's. These are private companies that, you know, Congress created to make sure that there was liquidity in the secondary mortgage market and and there's stuff like that.
▶ 0:51:36But taking positions, picking losers, picking winners is normally not been the ideology of the Republicans. And yet you see that in this administration and you don't see much talk about it on the other side saying wait a minute if the Democrats had done this the Democrats had put all this surveillance on the streets and what we see now the militarization that we see there would have been of course people screaming left and right because
▶ 0:52:06of the intrusion of government into our lives and I understand that but we don't see it now and again I caution ing you because there will be a time when the government flips and you will say, "Well, wait a minute. You can't do this." Well, we'll remind you that you didn't say anything. The Trump administration did it. And and it really is sad to see because again, I I'm not one that's against government. I think government generally does a good job.
▶ 0:52:34But I've always admired the Republicans really starting with Reagan saying there should be some limit here as to the intrusion that government has in our lives. But you've seen the creep become a race now. Not a creep. It's it's incredible the way this administration has really put the federal government into our lives. And even now even going to the airport, they take all of this information, biometric information. I don't know what they do with it because maybe you do, director.
▶ 0:53:04I don't know. Someone must know. But all that being said, I I do want to talk about elder abuse. You spoke about it a little bit, but I do want to get into it a little bit more. Um, you did say um in April of 2024, you published a financial trend analysis and looking at the patterns and datas of the elder financial exploitation.
▶ 0:53:24According to this analysis, between June 2022nd and June 2023rd, Fininsson received more than 155,000 elder financial exploitation reports associated with more than 27 billion in reported suspicious activity. The filings show that scams accounted for 80% of the reported elder financial exploitation activity. What role does FinSense play in addressing this financial exploitation against elder adults, older adults?
▶ 0:53:53Thank you, Representative Vargas. And um yes, so the the financial trend analysis on elder financial exploitation um and um different guidance um processes that guidance products that we have um issued.
▶ 0:54:10ask um filers, financial institutions to use those as guideposts to provide us with financial intelligence that law enforcement can action to actually go after those perpetrators of uh fraud against um our elderly population. And so, not only does FinSen uh play a role at educating financial institutions as to what to look for, so we get highquality financial intelligence, but we also actively support law enforcement.
▶ 0:54:40So, how do you use AI if you do it? Because I know my time's going to run out. How do you use AI to do this? So uh there is a of course it's an administration priority to incorporate the use of um of artificial intelligence tools um to analyze uh data and Fininsson like other federal government agencies is exploring uh that we do use advanced um artificial intelligence products uh in terms of machine learning and other data analytics
▶ 0:55:11um because Fininsen does collect and protect um a large amount of data in order to um in order to truly support law enforcement with the highest quality. Um
▶ 0:55:22my time is expired, but thank you. Thank you. I yield back.
▶ 0:55:25Thank Thank you, Mr. Vargas. I would like to recognize the gentleman from Texas, Mr. Sessions, for five minutes.
▶ 0:55:33Thank you very much, uh Mrs. Gaki. Uh I appreciate you being here. I'd like to ask for your help in helping me work through uh the entire not the entirety but what you have discussed here today about drug movement of money but directly related uh what is called anti-laundering regulations for residential real estate
▶ 0:56:06So, can you talk with me about that? The need for that information? I I'm old enough where I've run across people asking information when I paid cash for things and they were very specific of things that they wanted that were personal to me and not part of the Can you talk with me about that part of what Fininsson has done?
▶ 0:56:32Absolutely. Thank you um Representative Sessions for that question. So for the past 10 years at the um at the request of law enforcement, Vincen has sought through use of a temporary measure, the geographic targeting order, information on non-financed allcash purchases of real estate if they're done not by an individual but by a shell company. So I just two important caveats there.
▶ 0:57:01Um these are not financed mortgage. There's no mortgage lender involved at all. No financial institution.
▶ 0:57:09So nothing about what you have done would get in the process of an buying property on a cash basis.
▶ 0:57:22That's right. the the residential real estate rule which makes permanent the temporary measure of the geographic targeting order is focused on entities legal entities that are doing this purchasing and seeks reporting on those and there are exceptions to those two. So for example if um the disposition of a property for example is by court order it could be a settlement of an estate or something that would not be covered by our rule. I'd be happy to work with your team to
▶ 0:57:51Well, I'm the one that's got the problem with it, not my team. Uh, specifically what happened is when I went to uh file for a loan, they requested information that I considered private and extraneous to that information, but they wanted it personal private data and information.
▶ 0:58:11And so I moved into just to use cash instead of providing what I consider to be unprofessional asking of personal data. So you're telling me there's nothing I would not be caught up in that. You would not be looking at that. only where there is a shell company that is considered shell attempting to buy purchase real estate.
▶ 0:58:42That's correct, Mr. Sessions. It is a rule that is looking to pierce who are the real people behind the shell companies making cash purchases of real estate, not individuals.
▶ 0:58:55Good. Well, I would reiterate and I had not talked to the chairman about this, but in listening uh to uh the chairman about data and information that's being held by you or any other government really, anybody that is subject to being stolen uh by people.
▶ 0:59:16And what is the retention period that you generally have on issues that may have been in the past where you had completed the investigation? What do you do with that data and what is the time frame uh that you would keep it? Is there a retention
▶ 0:59:35Thank you, Mr. Sessions. Um so our the information that we hold that's filed by um under the bank secrecy act that Fininsson collects uh disseminates protects um is held at the highest um level of um of data protection for non-classified systems in the the in the United States government and in terms of a retention period this is something
▶ 1:00:01where where is that in the United States government Excuse me. Where is the data or the rules?
▶ 1:00:08You said it's being held by the highest security. Well, obviously social security is high high also and those files are purged. What is if you could please have your staff get back to me in a detailed fashion and tell me about the retention of data not in an active investigation but some that may have been that would have been completed or that was requested and not needed what that retention is where it
▶ 1:00:38goes and how long it's been kept.
▶ 1:00:42Absolutely sir
▶ 1:00:43I would appreciate that. When do you anticipate that you would provide that?
▶ 1:00:47Sir, we will get that to you in the next few weeks.
▶ 1:00:49Good. Thank you very much, Mr. Chairman. I want to thank you for holding this and I thank Miss Gaki for taking time to be here to help me clear up a question that I had. I yield back my time.
▶ 1:01:00Yeah. Thank you. Uh the gentleman from California, Mr. Licardo, is now recognized for five minutes.
▶ 1:01:08Thank you, Mr. Chair. I want to thank you and and your team, Miss Gaki, Director Gaki, for uh the really important work uh that Fenzen does. I I was a federal prosecutor many years ago and we relied frequently uh on the great work of Fenzen as we were trafficking narco trafficking at the or we were prosecuting narcot trafficking at the border.
▶ 1:01:36Um and in particular, we are seeing more and more of the illegal transactions relating to money laundering occurring um in crypto as well as fraud.
▶ 1:01:50Uh and I I commend you and your team for the work that you recently done on convertible virtual currency kiosks um or crypto ATMs which I know has been a particular source for Fininszen and a lot of law enforcement u in your August uh statement you acknowledge that there's rising fraud and cyber crime and drug trafficking through these kiosks.
▶ 1:02:18I presume that the concern arises because of this pseudonymity uh that relates to crypto transactions. Is that right? That's difficult often for people to identify who exactly is doing the transacting.
▶ 1:02:33Thank you um Representative Licardo for that question. Um I think there I do yes there can be some anonymity enhancing aspects to convertible virtual currency. I do know that our team works very closely and uh uses blockchain analytic tools in order to be able to aid investigations to ensure that that doesn't remain a barrier um and to um put out guidance for financial institutions to be um to be alert
▶ 1:03:03to um any um any aspects of um the misuse of these types of tools
▶ 1:03:11and particularly with the use of mixers and other tools. criminals are able to evade even some of the more sophisticated detection techniques in terms of identifying them. Is that right?
▶ 1:03:26Yes, sir. Now, mixers are something that um we're currently taking a look at. Um we issued a proposed rule on mixers in the previous administration and are exploring um a next the next step on that.
▶ 1:03:42Um we have to um take a look at um the fact that um that um you know we have to make sure that we tailor any approach here um to be really directed at illicit activity and that we are not sweeping in any um legitimate transactions. Sure. That are trying to leverage um you know uh these tools to for example shield their transactions from repressive regimes. It's a delicate thing.
▶ 1:04:12We've got to work through administration guidance and I look forward to engaging with you on it.
▶ 1:04:17And I recognize that there's legislation pending um Clarity Act in which we are looking to impose BSA requirements um to help you do your job and law enforcement do your job with regard to centralized exchanges. But of course, there's also decentralized finance, DeFi, where there are no such requirements. How exactly are you able to do your job when millions of dollars may be moving through DeFi?
▶ 1:04:42Particularly given recent studies that showed as recently as January that 91% of fraud and theft that was occurring in the 1100 cases that was examined under this study 91% was happening on D5 What exactly what tools do you have
▶ 1:05:01This thank you representative. This is something that we are actively working on. not just in um in implementing um different reporting and different exploratory um subjects set forth in the genius act of which Fininsen is a critical implementer but also um outcomes from the president's uh working group on digital assets and the report there.
▶ 1:05:24So looking at DeFi, looking at the appropriate requirements for that uh bank secrecy act requirements for that industry is something that uh my agency is taking on and we look forward to working with both industry and law enforcement to make sure we're striking the right balance.
▶ 1:05:42Perhaps I can just given my limited time identify my big concern. uh right now uh your agency through its rulemaking has decided that would not collect beneficial ownership information from US corporations or US persons and all that's required for to satisfy those standard beneficial ownership information requests is the name date of birth residential street address and the ID from your driver's license that's all it's required and we know that US companies
▶ 1:06:13shell companies can be created to move millions of dollars uh billions of dollars through these illicit channels using DeFi. You won't be able to identify, nobody will identify who these folks are because we don't have BOI requirements and you don't have any mechanism for identifying who they are on DeFi protocols.
▶ 1:06:33The gentleman's time,
▶ 1:06:34doesn't this create an enormous opportunity for criminals?
▶ 1:06:37The gentleman's time has expired. I'd encourage uh followup in in writing and as we'll have additional questions uh submitted for the record. Uh I'd like to recognize uh the gentleman from Texas who's also the chairman of the small business committee, Mr. Williams, for five minutes.
▶ 1:06:55Thank you, Mr. Chairman, and thank you for being here today. Uh Fininsson's beneficial ownership reporting regime created a compliance nightmare for small business owners in my home state of Texas and across the nation. While I was pleased to see that Treasury was issued an interim final rule that would require only foreign companies to report their BOI to Fininsen, I am still concerned about the data on domestic small businesses that was collected before the change in reporting requirements.
▶ 1:07:20By holding on to this data, Finen has created unnecessary privacy and security risks for millions of small businesses across this great country. So, Director Gaki, will you commit to deleting the beneficial ownership information of business owners who are no longer required to file with Finins?
▶ 1:07:36Representative Williams, thank you so much for that question. And um with the interim final rule that was issued in March, um uh as you noted, Vincen has readjusted uh the um the requirements for filing to really put the obligations only on foreign reporting companies and only to the extent they have foreign beneficial owners. We are in the process of reviewing the comments to that rule and we expect to bring make that rule final this calendar year.
▶ 1:08:06With the finalization of that rule, we expect to resolve um any data questions involving the data that we have and it is our intention in in along with resolution and finalization of that rule to delete any information that was filed that is no longer required to be filed um that is currently um being protected at
▶ 1:08:30Thank you. Um I want to shift gears and discuss a residential real estate transfer rule. This rule requires a certain business involved in real estate closings and settlements to collect and report beneficial ownership information nationwide. In practice, more than 800,000 individuals would be required to file reports result in over 4 million hours of compliance work. The estimated cost of this burden is an astonishing $630 million according to some of Finen's estimates.
▶ 1:08:57These compliance costs will inevitably raise the price of purchasing a home, making it even harder for families to achieve the American dream of ownership. So, director, again, given this rule raises compliance hours and costs at an alarming level, is Finen considering delaying this rule to improperly rescope it in a way that it does not create so much regulatory burden on small business?
▶ 1:09:19Representative Williams, thank you again for that excellent question. We believe that the residential real estate rule puts in place what had been a temporary measure across 10 years of collecting information from shell companies making non- finance purchases of of real estate that has been um incredibly beneficial to law enforcement.
▶ 1:09:40And we have renewed uh that GE geographic targeting order across administrations based on the strength of the reporting of the of the information and how vital it is for law enforcement. We believe that the benefits to um to the um to the United States to Americans in gaining this information um is critical and justifies the expense of the residential real estate rule.
▶ 1:10:06And in fact, we believe that the um ensuring that um shell companies purchasing um financial financial purchasing uh residential real estate um in a way that's not been detected can actually skew home prices and which is another justification for why this rule is um we believe is um is is uh justified and we do expect we are planning for it to come into effect in December. Okay, last question real quick.
▶ 1:10:36The residential real estate transfers rule, like the beneficial ownership reporting requirements will affect a large number of small businesses. As we saw from the beneficial ownership information reporting requirements, millions of small businesses in the United States were largely unaware that they had to comply and were even unaware of the existence of finan. My concern is that similar to as before, small businesses like title companies will not be educated on those requirements and unfairly punished for something they are unfamiliar with.
▶ 1:11:02So, director, quickly, this new residential rule shifts a heavy burden on title companies, many of which were small businesses, and given the complexity of the rule, what has Finson done to educate and prepare these companies? And has Finson engaged directly with trans uh title professionals and issued any public guidance to help them understand and
▶ 1:11:20Thank you, Representative Williams, and thank you for that. Another excellent question. We have been working with title companies on education, but if we determine that more time is needed for them to be able to uh to implement this rule, we will certainly explore methods uh and ways to give them that additional time to ensure a um a um responsible implementation of this rule.
▶ 1:11:45Right. Thank you very much. I yield my time back.
▶ 1:11:49Uh thank you, Mr. Williams. I now recognize the gentleman from Kentucky, Mr. Bar who's also the chairman of the subcommittee on financial institutions for five minutes.
▶ 1:11:57Uh thank you Mr. Chairman. Um Director Gekki, thank you for your service. Um Fininsen uh is responsible for issuing guidance for uh section 314b of the Patriot Act which allows financial institutions to share information with one another regarding activities that may involve money laundering or terrorism.
▶ 1:12:20Only 3,626 banks out of the approximately 9,148 banks and credit unions nationwide are actually registered to share information. And in the Commonwealth of Kentucky, only 47 financial institutions out of 178 participate in 314b data sharing.
▶ 1:12:41Uh, Director Gaki, I've heard from community banks in Kentucky that there is a lack of clarity with the current guidance on the safe harbor on what is permissible to share. If Fininsen's guidance better outlined what data is covered uh under the safe harbor and promoted more fraud information sharing, it is likely more institutions would participate. What is FinScent doing to increase the uptake in this data sharing?
▶ 1:13:10Representative Bar, thank you for that excellent question. The 314B program is an important one for Fininsson and uh we want to ensure that financial institutions are leveraging the information sharing potential involved in that to the extent your banks um in Kentucky or banks elsewhere are um asking for greater clarity on to on the safe harbor.
▶ 1:13:36I can commit that as something we will look into and explore um providing it. This is something that we use our Fininsen exchange events to ensure as well understood. But if greater guidance is needed here, um I will certainly look into it.
▶ 1:13:54Thank you very much uh for your attention to that that concern. Uh also, um you know, if there's one complaint or concern that, uh community financial institutions raise with me, it's it's the prevalence and increased um prevalence of fraud in our financial system. And you noted in your written testimony that cyber enabled fraud remains elevated and and uh increased reports of fraud and cyber crime crime.
▶ 1:14:21Uh we're we're seeing up upticks in that that reporting every single year. elder financial exploitation, government benefits fraud, digital asset investment scams, account takeover attacks, AI enabled fraud. Um, so lots of theft.
▶ 1:14:38Uh, what is F and just you've you've talked a little bit about this in your in your testimony, but can you amplify FinSense focus on this and how you can help uh financial institutions that that want to do right by their customers and limit that their exposure to fraud? Absolutely, Representative Bar. So, I think you know uh making sure that financial institutions have the tools they need to help detect it.
▶ 1:15:04um whether through alerts, advisories, financial trend analyses, through exchange events where we bring law enforcement together with um financial institutions and public private um events um to ensure that um there's a direct communication to act as that um critical uh juncture between law enforcement and um um banks of all sizes, financial institutions of all sizes to ensure their um their um their data that they are looking for what law enforcement ment needs
▶ 1:15:34and helping protect their customers and in turn the American people. That is absolutely something. I should also note that another thing that Fininsen does is um we also have our own targeting authority through special measures to look at foreign actors of primary moneyaundering concern that are engaging in um fraudulent activity.
▶ 1:15:55We took one action this past year um against Wayi One Group based in Cambodia which was um being used as a um as a vector for elder financial exploitation for um for pig butchering and the like. We issued a notice of proposed rule that we hope to make final soon. Um but that was a way in which we could look at a critical external node for fraud and stop it and and help financial institutions um detect it in their own systems.
▶ 1:16:25Thank you. my final time. Um there's a narrative that um and critics of um the innovation in crypto and digital assets that uh that uh the the gravit that the the movement of transactions to the blockchain is uh creates additional fraud uh risks and cuh risks for criminal activity.
▶ 1:16:45Can you can you can you share uh Fininsense's views on how uh the movement of transactions to the blockchain actually could assist in law enforcement and preventing fraud, criminal activity, money laundering and the like.
▶ 1:16:59Thank you, Representative Bar. And I know that I have very little time, but I can tell you that yes, the blockchain actually has brings transparency and with the right tools, you can use it to leverage to really help detect trans illicit transactions for law enforcement. And I'm happy to engage with you.
▶ 1:17:13Thank you. I yield back. Thank you.
▶ 1:17:15Thank you, Mr. Bar. The gentleoman from California, Miss Kim, is now recognized for five minutes.
▶ 1:17:20Thank you, Chairman Davidson. Uh, I want to thank Miss Gaki for joining us today. Um, last year, Finson finalized the residential real estate transfer rule making that, uh, required title insurers to provide Finson with the names of the individuals who purchased a home valued more than $300,000 in Southern California. and uh utilize certain forms of payment.
▶ 1:17:46I want you to know in uh Southern California, especially in Orange County where I represent, the medium home price there is over $900,000, almost a million. And that placed a high burden on many of my constituents who own small uh familyrun title insurance comp companies.
▶ 1:18:06and and in uh Vincent's economic analysis of the residential real estate reporting rule they estimate that the first year compliance cost could reach close to $560 million. So, can you talk about how Finson will tailor your approach to uh this issue so California's uh small businesses are not unfairly burdened by duplicative or low value reporting requirements.
▶ 1:18:37Thank you, Representative Kim, for that um question. And um we are working very closely in implementation of the residential real estate rule um to with with title um with with organizations that represent title companies to ensure that the um the uh requirements are well understood and that they are implemented in as coste effective and efficient manner as possible.
▶ 1:19:06and to ensure that um small businesses like the title companies in Southern California have adequate resources and knowledge to implement this is certainly something we will explore to ensure they have earlier
▶ 1:19:20exchange with my colleagues earlier. Uh you talked about uh GTO geographic targeting order. You said that that is a temporary tool that is used by law enforcement and the success of it made it permanent. But the comments and the feedback that I'm hearing from my constituents about that is that there is such little understanding about how that information that Fininsen is collecting is actually helpful.
▶ 1:19:50So can you talk about how Finson is utilizing the data from the real estate GEO?
▶ 1:19:57Absolutely. Thank you, Representative Kim. So the data is made available and accessible to law enforcement users at local, state, federal, and national security professionals um across the um country. We have um almost uh 25,000 law enforcement users across you know 400 different agencies in the United States at all levels. um accessing this information.
▶ 1:20:22We this is this provides critical tip and lead information that has proven vital to successful prosecutions for crimes such as narcotics trafficking to include fentinel for fraud for um for uh for terrorist related um actions um across the um across the um country. I'd be happy to give you more specific details um in a follow-up conversation.
▶ 1:20:48All right, let's talk about that uh the residential real estate role. Uh once again uh it places much of the reporting responsibility on title uh companies and uh there is over 90% of the companies being small businesses. I want to ask you what steps you are using. I know it was already discussed regarding the uh the uh education regarding preparing the industry for that complex role.
▶ 1:21:14Um, you did say Fininsson is doing your best to educate the industry, but uh I would like to take you up on that offer and see if uh you can uh come to my district and have a roundt discussion with my constituents, my title insurance companies in my district. That would be very helpful and I'm happy to put together a round table discussion with
▶ 1:21:36We would welcome that opportunity. Thank you very much.
▶ 1:21:38Great. All right. Uh, however, I remain concerned that the expansion of the uh, residential real estate rulemaking nationwide will uh, only hurt these family-owned small businesses and the implementation of the nationwide GTO, which is starts on December 1st. Uh, it seems like far too little time to give these small businesses time to prepare.
▶ 1:22:03So to that end, I'd like to submit this letter that I received from the American Land Title Association into the record and it highlights their concerns with the timeline and the impacts that this will have on the title industry. So I hope you will consider delaying uh review this and delay the implementation of this nationwide GTO and continue to work with the industry so we can find effective and efficient ways to fight the moneyaundering.
▶ 1:22:30Without objection.
▶ 1:22:32Thank you. The gentleman's time is expired and the gentleman from Illinois, Mr. Foster, who's also the chairman of the subcommittee on financial institutions now recognized for five
▶ 1:22:41Uh, thank you, Chair Davidson, and thank you for joining us, Director Gekke. Now, Director Gekki, in November of last year, Finson issued an alert warning for financial institutions about the increase in identity fraud schemes associated with the use of deep fakes and created with generative AI tools. Uh, criminals are using Gen AI to cheaply mass-produce false identity documents and circumvent live identity verification and authentication m methods in online transaction.
▶ 1:23:11I appreciate Vincen's uh efforts to raise awareness of these scams and I encourage you to do more because it's clear that Gen AI and the deep fakes that they produce will continue to become more believable and accessible as time goes by. Now, I believe the best tool that we have at our disposal today to verify identities online is is a form of secure digital ID.
▶ 1:23:35And the tool at hand is the mobile driver's licenses currently being issued by several states and in fact um most many countries most countries including um all countries of the EU. Digital IDs can allow consumers to prove they are who they say they are in online transactions. A verified credential attach attached to a secure mobile device creates a reliable system that's extremely difficult to fake.
▶ 1:24:00I believe this technology would go a long way towards stopping identity fraud in the banking system and also with fraud and government benefits. It is however my understanding that many financial firms do not feel that they have the regulatory go-ahad to start using digital IDs and digital driver's licenses in their AML KYC processes and that they need guidance from regulatory agencies like Vincen to start implementing this technology in online transactions.
▶ 1:24:28I think there's also a federal role in providing federal standards for what states are providing uh adequate digital driver's license and some may need improvements. Um so my question is do you expect Vincen will take steps to provide the clarity regulatory clarity for firms uh to start using these for KYC purposes and online Thank you, Representative Foster, for that excellent question.
▶ 1:24:53And I also want to thank you for your um for your um focus on this issue across many years. Um I um I want to note that um this is certainly something that Fininsen is um looking at.
▶ 1:25:08questions of identity are critical to our work on fraud and um you know the the misuse and the of identity whether it's using generative AI or less sophisticated techniques is something that we are very very much focused on and looking um to ensure that uh we're providing the best guidance we can to financial institutions.
▶ 1:25:33Um, I would like to um I I want to commit that I will work with my federal banking agency colleagues to look at what further guidance we can provide to financial institutions on this matter. Uh this past year we did um work with our um other um financial with our federal banking agency colleagues um to work on how uh to to adjust how financial institutions can um uh adjust their processes including uh
▶ 1:26:03in terms of collecting and verifying taxpayer identification numbers in in use of customer ident customer identification programs. But I look forward to looking at this more closely and seeing what we need to modernize in terms of guidance for financial institutions going
▶ 1:26:20Yeah. Thank you. And I think there's also an important federal role that isn't yet doesn't yet um exist. uh which is to verify to sus specify which cell phones are actually safe to uh deploy digital IDs on them because it it's well documented that certain early model cell phones had a secure enclave that was not in fact secure meaning that someone could go and hack your cell phone and impersonate your digital driver's license which obviously be a disaster um if someone used them.
▶ 1:26:51So we will need at some point probably a federal agency or someone they delegate it to to call balls and strikes on this version of a cell phone is okay. It's got an adequately secure enclave. This one cannot be used. You know that's sort of being done by Apple in its ecosystem by just saying we're not supporting the iOS for once um you know phones get old enough.
▶ 1:27:12the Android system is a complete um you know I don't I so it's less organized and it will be difficult to do that but this is an important role and if you could for the record come back and give us some suggestions on what you what is needed there to specify when we can trust the silicon in different versions of cell phones and where that federal agency is best housed because right now you know DoD does some of it and other agencies do some of it but there isn't an organized standard federal way
▶ 1:27:42to do that and I think it's a missing piece here. Thank you. And my time is up.
▶ 1:27:49Thank you, Mr. Foster. The gentleman from Tennessee, Mr. Ogles, is now recognized for five minutes.
▶ 1:27:54Thank you, Mr. Chairman, and thank you to the rec director for being here and answering the questions uh so thoroughly. Uh I do want to perhaps emphasize, you know, what may be the key takeaway uh as as you hear everyone and and I want to compliment or echo uh Mr. Foster here in a moment, but you know, when you look at um you know, Mr. Sessions asked about the data retention period. Uh Mr.
▶ 1:28:18Williams asked about the the notion of will you delete data that otherwise would no longer be collected. Then I would also take that a step further that if if you've collected data and there's been an investigation and someone's been cleared, then will that data be deleted because it's no longer necessary? We've seen uh federal agencies like Treasury have some security breaches, security issues.
▶ 1:28:42And so the idea that this data is somehow impenetrable or safe, I think is a bit of a misnomer when we've seen systems all across uh you know our government quite frankly have failures in that security. We know that China and other uh you know adverse hostile entities and nations are trying to get access to this data.
▶ 1:29:04So, um I think it's important that that we address this data issue, this data retention issue and have very clear parameters and quite frankly aggressive parameters in deleting that data versus housing it in perpetuity because of the risk associated therein.
▶ 1:29:23Um, and again, even in your own uh comment, you talked about data security and uh you know, the the issues with trafficking and fentanyl and uh and and such, that's not your average average small business owner who's having to report and suddenly has a vulnerability out there. But with that, thank you for uh addressing those and we look forward to getting that that information back from you.
▶ 1:29:45You know, we've seen roughly 100,000 Americans die every year from drug overd doses, most from fentanyl, and Treasury itself has linked Mexican banks and crossber cash flows to the cartels finance financing that flow and that poison. How many American overdose deaths can be traced back to the laundering networks running through Mexican banks like Senco, Intercam, or Vector? And why is Fininsson still granting them extensions instead of cutting them off from the US financial system immediately?
▶ 1:30:14Thank you, Representative Ogles for that for those comments and for that excellent question. I don't have an answer on the number of deaths that can be traced back to these financial institutions. It's certainly something that I can I we can we can try to estimate. Um but I will say that um any death would be too much, right?
▶ 1:30:31And so um but what we found in publicly calling out these three financial institutions as a primary moneyaundering concern is we uh we made a a very public case as to how they have supported cartel The extensions we have granted in terms of the of the effective date have as we've noted in public because we've been working so closely with the Mexican government which has taken over those financial institutions including replacing
▶ 1:31:02their um their uh um the the heads of their compliance departments at these financial institutions. It's important when we take when we took action against these financial institutions that we also made sure that any innocent people to include innocent Americans, innocent Mexican citizens were able to extricate their funds from these um institutions and that's what the time period um has of a delayed implementation was able to accomplish but meanwhile
▶ 1:31:32we have been working very closely with the Mexican government to ensure that um these financial institute initutions are are um being um are being uh effectively regulated at the local level in Mexico and that any further um any further um uh uh moneyaundering concerns have been um removed.
▶ 1:31:55Well, and I appreciate that, but I also want to give caution. Uh and we've seen that, you know, most if not all of the institutions in Mexico are infected with cartel operatives. So this idea that they are going to self-regulate is I think somewhat laughable. And so at the end of the day, this is about outcomes.
▶ 1:32:17Are you ceasing the flow of illegal funds into the United States and back to Mexico, which is flooding our streets and killing our kids? And if you're not, then you need to shut it down. Whether you like the president or not, I happen to be an ally, an advocate for the president. Crime has come to a halt in this city because the president had a will to do so.
▶ 1:32:45The former administration said we couldn't secure the border and in a matter of days, the border was We have to have the will to show Mexico, the cartels, and any of their associates that if you mess with the United States of America, we will shut you down. Period. And again, they're not necessarily our ally when they're allowing the killing of our children and flooding our streets with illicit drugs. With that, Mr. Chairman, Chairman, I yield back.
▶ 1:33:15Thank you, Mr. Ogles. The gentleman from Illinois, Mr. Castton, is now recognized for five minutes, sir. Thank you. Thank you, Mr. Chairman. Uh, thank you for being here. Um, I want to follow up on the the discussion you had with Mr. Licardo around around crypto ATMs. Um, the Mr. Chairman, I'd ask unanimous consent to enter into the record a Chicago Sun Times article titled Chicago's Crypto ATMs are magnets for drug dealing and scams on older adults.
▶ 1:33:41This has been a a particular issue in Illinois, but obviously nationwide. I think in 2024, the FBI had received more than 10,000 complaints about crypto ATMs and reported more than $246 million in losses. In August, Finsen published a notice that emphasized the irreversibility of crypto transactions on ATMs and noted that there's a high non-compliance with uh with anti-moneyaundering laws among the operators of crypto ATMs.
▶ 1:34:09At a high level, can you give any sense of what you're seeing as far as the trends and suspicious activity reporting specific to crypto ATMs that we should be
▶ 1:34:20Thank you, Representative Casten, for that um question. I will say that crypto ATMs like other financial institutions, you know, are subject to the Bank Secrecy Act and some are more compliant than others. Um it is we are seeing however as we noted in the alert um high use of certain crypto ATMs uh to uh to to as a as a um as a critical way of defrauding Americans.
▶ 1:34:48So it's something we're looking at very closely. I don't have an estimate in terms of the of the industry, but outreach to that industry and uh in ensuring that industry is as compliant as possible is one of um is one of our key objectives.
▶ 1:35:06Okay. I I'm particularly interested, you know, as you dig through and maybe we can follow up off offline about the impact on seniors. the I I I represent Chicago suburbs, which given the way Chicago is laid out means that I have about 40 mayors who I have to keep in touch with of lots of little small towns. And one of them has a very low tax base. It's one of these towns that depends fundamentally on, you know, the the revenue from a couple convenience stores and liquor stores and not a lot of larger tax base in the community.
▶ 1:35:36And even in that tricky financial situation, the convenience store operator said they they removed the Bitcoin ATM because the owner said it just broke his heart how many seniors he saw walking in there every day and putting money into the machine and then coming back later and saying this this money's disappeared. We've had at least 20 states that have adopted or considering laws and regulation on crypto ATMs. Um Illinois did just enact a new law to require that operators at least impose daily transaction limits.
▶ 1:36:04Um, would you support similar federal requirements on ATMs to at least slow
▶ 1:36:16It's something I'm going to need to look into and take back. Um, I I can I can absolutely commit that it's something that we'll look into and work with Treasury leadership on an approach.
▶ 1:36:27Okay. And and I'm and I I know you had an exchange with Mr. bar against way one if I'm announcing pronounced that right. A part of what scares me on this and I think we have done a terrible job this term in Congress is we've allowed all of these transactions to operate overseas. the mixers are overseas, the transactions are overseas, and it's great if we've got the SAR, but then we don't have a way of getting in, right?
▶ 1:36:50And and so I guess with the, you know, with the time that's left, are there is there specific statutory authority that you currently lack that would allow you to go after the bad guys? Like I'm not talking about going after the good guys, but if you see that crime has happened, if you see that these pig butchering scams, where are you limited in your ability to prose?
▶ 1:37:17One idea that was in the president's uh the report to the president on the digital assets working group and you saw it with our action on the way one group is we used an authority um under section 311 of the Patriot Act that was actually built for a different era when the greatest special the special measure that we used that was available to us was to cut off correspondent payable bank accounting which doesn't really factor in for in the virtual assets that space.
▶ 1:37:47Um, but rather some uh some newer authorities targeted uh to Russian elicit finance or synthetic opioids uh trafficking 2313A 9714 they allow us to prohibit transactions all transactions involving a group like way 1. Now, we used the 311 authority on way one to great effect. Um, and we're able to um it was it's a very powerful authority.
▶ 1:38:09I'm very proud of that action, but um involving fraud um in other respects would be a way that we could um that we could modernize this authority. And in regardless, my team very much looks forward to working with you on a
▶ 1:38:28I see him out of time. I believe Mr. Times has been active on the section 311 piece and let's let's talk offline about how we might um tweak that and improve it. Appreciate it and yield back.
▶ 1:38:41Thank you. I'd like to recognize the gentleoman from Florida, Miss Salazar, for five minutes.
▶ 1:38:47Thank you, Mr. Chairman, and wonderful to be here with you, Mrs. Gaki. I'm Maria Salazar from Florida 27 district representing the city of Miami. And I'm sure that you're familiar that uh there's a lot of business between Miami and the uh regime in the island of Cuba.
▶ 1:39:04And we have discovered that 11 companies in my district who are blatantly openly uh breaking the Cuban embargo and companies are doing business with the Cuban regime, giving them oxygen so they can feed the repressive apparatus. And I just sent a letter to the Secretary of the Treasury and to the U uh Mr.
▶ 1:39:31Rubio, Department of State asking them to investigate and to shut them down. Um, and I wanted to ask you to please help and uh, stop this madness because you cannot be dealing, you cannot be taking money from Miami and from the Cuban exile community and be sending it to the Cuban regime to uh, beat on uh, the people that are trying to be free.
▶ 1:39:56So, do you think I could have your word for you to be able to help me and your your office to do something with this? I mean, I'll be I'm going to be forwarding to you the letter, but I really would like your commitment on the record. Thank you, Representative Selzar. And I um and for many years um to Finen, so I'm very familiar with our law, with our restrictions on dealing with the Cuban regime.
▶ 1:40:22So I commit to you that Fininsen will certainly take a look at this information and see how we can support investigations whether at OFAC or other parts of the US
▶ 1:40:32They are violating the embargo. You cannot do that because that's the United States law. Okay. Now, another another issue that is highly concerning to me as a United States citizen and as the representative of the city of Miami. Back in June, your office put on the blacklist three Mexican banks. One of the banks is called Cibano.
▶ 1:40:54Um, this is a very touchy subject because I'm concerned not so much about CBO but about the American banking system. There has been no proof shown of money laundering from those people.
▶ 1:41:10I have met I'm not saying that there is but they have been asking for proof and your office has not shown why these people need to be on that list. The owner lost the bank $400 million just because we, the Americans, put him on the blacklist. You know, we have we have a lot of weight internationally in our system.
▶ 1:41:39We are innocent until proven guilty. Aren't you concerned? I mean, I would be I'm terrified that this could happen to any bank in my district or any bank in the United States. So, please tell me and don't tell me this is under investigation. We cannot talk about it. Thank you, Representative Salazar.
▶ 1:41:57I stand by Vinsen's actions against the three financial institutions, Sibanco, Intercam, and Vector made very detailed public cases in orders um issued under authority given to us by Congress. I know you're doing your job.
▶ 1:42:19I know that you have to look for the bad guys, but my concern is that you could have made a mistake that could be repeated and that is not the American way of doing business.
▶ 1:42:31I understand
▶ 1:42:32simple terms.
▶ 1:42:34How come there is no proof that they you you insisted on keeping that bank and I have no interest in the bank, but it's just the it's just the the the We followed the law set forth in the fend off fentinels uh sanctions act as amending the fentinel sanctions act um and found um found a basis on which to to call these three financial institutions of primary money laundering concern.
▶ 1:43:04We um worked
▶ 1:43:06when you show the proof.
▶ 1:43:08We publicly issued it in orders um in uh when we issued these orders and be happy to share them with you. I I read them. Um they are not um they're it is not and you know that.
▶ 1:43:25So what I'm saying is that how can we in the banking system make sure that we are not going to have a little bank be put on the blacklist and then the owner of that bank lose their assets and their and their own and the and the bank.
▶ 1:43:40Now I want to clarify that this authority is only targeted at is only can only be used against foreign um foreign sources of p of moneyaundering of pime they're called primary moneyaundering concerned whether they're jurisdictions classes of transactions or primary moneyaundering concern but I respectfully disagree I believe we have made um the necessary
▶ 1:44:02I understand what you're saying but I I think the message I need to send as the chairman of the western hemisphere subcommittee within lady's time is expired is that we the Americans we carry a lot of weight and we need to be more careful
▶ 1:44:15because lady's time is expired.
▶ 1:44:18Thank you, Mr. Chairman. Thank you,
▶ 1:44:19The gentleman from Iowa who's the vice chairman of the subcommittee, Mr. Nun from Iowa is recognized for five
▶ 1:44:27Well, thank you, Chairman Davidson. I appreciate you holding this very important hearing today. Director Gaki, thank you so much for coming out to Iowa. And while we may be uh, you know, you're under the Biden administration, you're now serving under the Trump administration, I want to say I appreciate you hearing from folks in our district and coming with me and holding a round table to actually be able to discuss some of the things that are working. Today, we're going to talk about some of the things that are challenges. When you came out, we talked about the corporate transparency act.
▶ 1:44:52We talked about the policing of over 32 million small businesses and the heavy impact that placed on them. Everything from $8,000 per small business to be able to reach compliance. And if they failed, we're talking about a $500 a day fine. In some cases, up to two years imprisonment for failure. Now, you got some Iowa nice feedback on that, and I appreciate you being there to hear from them. But it will be no surprise to you. I would like to talk about some of the red tape that's impacting us today.
▶ 1:45:19Right now, Fininsson receives close to 20 million CTRs and 5 million SS. These are financial reporting requirements. Challengingly, it's believed that most of that information that was done by financial institutions, including very small institutions, was never used. To make matters worse, it found that these can take over 21 hours to complete each one of those. So, let's put this in real world terms.
▶ 1:45:41In Main Street, Iowa, that means we've got folks spending upwards of 533 million hours filing reports for Vincent and the federal government. I'd like to ask, do we have any perspective on how many of those reports resulted in actual prosecutions?
▶ 1:46:00Thank you. Um, thank you, Representative Nun. And I want to thank you again for welcoming me and my team to Iowa. Um and um so one of the key objectives of this administration uh that we're focused on is is reforming the bank secrecy act regime, the MLCFT regime in the United States to ensure that is riskbased and focused on the highest threats um impacting our law enforcement and national security and that law enforcement is directing its resources to those
▶ 1:46:30highest priority threats.
▶ 1:46:32Understood. And part of that is taking a look at reporting. It's say the reporting that we gained. We work very hard to try to ensure that we are engendering that feedback loop uh between law enforcement and financial institutions to show that the reporting is being used. Um and I think uh that it's not just uh prosecutions that are um that uh that happen, but uh that that this reporting helps with this.
▶ 1:46:59Dr. Jackie, I I appreciate that. Now, here's the reality. We did this with CTA. We went after 40,000 bad actors, but we in snarred 32 million Americans in the process. My concern here is we're looking at 25 26 million reports. How many arrests were made as a result of this reporting? Can you just give me a number?
▶ 1:47:20Sir, I I'm sorry. I don't have the number off the top.
▶ 1:47:22Okay. All right. That's fair. Um, let me ask this. Can you commit to publishing the effectiveness of those numbers?
▶ 1:47:30Certainly, I can. Look, we in um we what we do in uh in an annual report that we put out is we uh try to
▶ 1:47:37I'm going to look for the last year's numbers and I'm going to compare it to the 26 million and the 533 million hours of reporting. We need to do some analysis on this. The other part is our community banks are drowning in red tape while cartels are clearly laundering billions in fitnol dollars. We need to focus on the real results, not on the compliance reports requirements coming out of banks. Let's agree to go after the bad actors. I want to quickly get to the Treasury hack that occurred earlier this year when the Chinese Communist Party went after Treasury systems.
▶ 1:48:04Who at Treasury was fired for allowing the Chinese into Treasury systems?
▶ 1:48:10I'm sorry, sir. I don't have a response to that question.
▶ 1:48:12Okay. The hack showed exactly why sensitive small business ownership data that doesn't belong on government systems was intentionally hacked. There's no indication that anyone was held accountable. If this happened to one of my small banks or my small credit unions, those guys would be out on the street and there would be a full inspection into what happened. I've not seen that happen at Treasury. So, here's my ask right now.
▶ 1:48:33For those banks and lending institutions that have data on your systems that were hacked by the Chinese that I think are arbitrarily being kept on data servers, are you willing to help us commit to deleting those before another breach occurs? Sir, I'm happy to I'm happy to make sure that the information that we collect and protect is held to the highest security standards. I'm aware of no breach of the Bank Secrecy Act data that we protect.
▶ 1:48:57Well, let's look and see the afteraction of what happened with the Chinese because I've seen no accountability to be able to actually hold whether that's true or not. I look forward to opportunities to work together on that. And then finally, Director Gecki, I think one of the things we have worked on together is the Guard Act, making sure money laundering does not take place. I'd like to thank you for giving our team technical assistance on going after this, protecting seniors and helping our local and state law enforcement. You know, is there anything you'd like to add on what we're doing to help protect through the Guard Act?
▶ 1:49:25I'd just like to thank you for your focus on the important issue in the Guard Act and just want to if you need any further technical assistance, we're happy to happy to supply it. Thank you.
▶ 1:49:34Appreciate to work together that. Thank you, Mr. Chair. I yield the remainder of my time. Thank you, Director.
▶ 1:49:37Thank you, Mr. Nun. I'd like to ask unanimous consent to submit for the record a report by the Independent Community Bankers of America for the Financial Crimes Enforcement Network recommendations for better coordinated and more effective policies enforcement.
▶ 1:49:54That objection, we'll pause uh for a uh swap out on microphones. Uh, we have a failing microphone.
▶ 1:53:12Test. Can you This works. Right. The gentleoman from Michigan, Miss Talib, is now recognized for five
▶ 1:53:30Thank you, Mr. chair. Um, director, uh, do you know, did have you heard about in July how Senator Widen announced that the Treasury Department has suspicious activity reports on Jeffrey Epstein's financial network detailing, I think, thousands of transactions totaling $1.5
▶ 1:53:49Thank you, Representative Tiv. I am familiar with Senator Widen's
▶ 1:53:53Yep. Are you among the largest transactions are two that JP Morgan Chase Morgan Chase reported with Russian banks for as much as hund00 million. Are you aware of that one?
▶ 1:54:04I'm aware of Senator Widen's communication. Yes.
▶ 1:54:07Can you tell the committee more in regards to I mean yesterday it was revealed that um just yesterday that Chase employees knew of these suspicious transactions for more than a decade and they were ignored. Are you familiar with Well, I thank you, Representative Tip for these um questions and um given the the sensitivity of the data that we obtain um through the bank secrecy act to include these SARS I want to assure you that Treasury is taking this very
▶ 1:54:38We as committee members can we have access to that information? It should be public. Correct.
▶ 1:54:43This is um this is highly
▶ 1:54:45Can you be subpoenaed for the records? We are we are working with Representative Comr to ensure that we provide this.
▶ 1:54:51Well, I'm going to yield the rest of my TAM director to my ranking member uh Bey. She'd like to put a motion because I think financial services committee should also have oversight in regards to any banking institution. Um as somebody that serves on oversight, sat at a round table with girls that were as young as 13 years old who asked us to follow the money and I think it's our responsibility as members of Congress to do that. And with that, I yield the rest of my time to ranking member Bey.
▶ 1:55:20Thank you, Congresswoman Tib. Uh, Mr. Chairman, pursuant to clause 2M of House Rule 11 and clause 2K6 of the House Rule 11, I move that this committee issue a subpoena to the Secretary of Treasury to return to the majority and minority of the subcommittee on national security, elicit finance and international financial institutions of the Committee on Financial Services and the Committee on Financial Services.
▶ 1:55:47all complete and unredacted documents related to Jeffrey Epstein or individuals and entities associated with Jeffrey Epstein, including but not limited to wire transfers, bank accounts and other transactions, other accounts, account holders that were party to any such transactions, currency transactions, actions, reports, suspicious activity reports, and other bank secrecy act data.
▶ 1:56:16any documents related to a description or review of the network of Jeffrey Epstein's conducted by any party, including but not limited to any law enforcement investigation and/or investigations or review by any other party in any document or review that addresses any connections to any Russian-based financial institutions, individuals, and entities, including but not limited to entities that are currently under United States or allied sanctions. is
▶ 1:56:48uh the gentle lady has moved to authorize a subpoena. For what purpose does the gentleman from Oklahoma seek
▶ 1:56:55Mr. Chairman, I seek a point of order on the motion.
▶ 1:56:57Point of order has been reserved. The committee will suspend and consider the pertinence of this motion.
▶ 1:58:03The committee will The subcommittee will now consider the motion offered by Representative Batty to authorize his peanut. Does the gentleman from Oklahoma insist on his point of order?
▶ 1:58:14Mr. Chairman, I do not insist on my point of order.
▶ 1:58:16For what purpose does the gentleman from Oklahoma seek recognition?
▶ 1:58:20Mr. Chairman, I move to table the
▶ 1:58:22The gentleman has moved to table the motion. The motion is not debatable and the question now occurs on the motion to table. Those in favor shall signify by saying I.
▶ 1:58:32All those opposed shall signify by saying nay.
▶ 1:58:35In the opinion of the chair, the eyes have it.
▶ 1:58:37A request a roll call vote.
▶ 1:58:40A recorded vote is requested. All those in favor of a recorded vote, raise your hand. A sufficient number having raised a hand, the recorded vote is ordered. will now take uh the vote on the motion to table and we'll suspend until the clerk has uh set things in motion to do that.
▶ 2:02:13The clerk will call the role.
▶ 2:02:17Mr. Lucas.
▶ 2:02:22Mr. Sessions. Hi. I
▶ 2:02:26Mr. Bar Mr. Williams
▶ 2:02:33Mrs. Kim Mr. Ogles
▶ 2:02:41Mr. Nun Mrs. Mlan Miss Salazar Chairman Hill Ranking member Batty, Mr. Godheimer,
▶ 2:03:04Mr. Vargas,
▶ 2:03:07Mr. Foster,
▶ 2:03:11Mr. Gonzalez.
▶ 2:03:14Mr. Torres, Mr. Casten, Ranking member Waters.
▶ 2:03:32Chairman Davidson. Miss Salazor.
▶ 2:03:53Would the clerk read how each member
▶ 2:03:57Chairman Davidson I. Mr. Lucas I. Pete Sessions I. Mr. Williams I. Mr. Ogles I. Mr. Nun I. Miss Salazar. I German Hill I ranking member Batty. No Mr. Godheimer. No Mr. Foster. No Mr. Casten. No ranking member Waters. No.
▶ 2:04:26Has any member not voted or wish to change their vote?
▶ 2:04:29Parliamentary inquiry.
▶ 2:04:32The ranking members recognized for parliamentary inquiry. I want to make of what we're voting on or what has been attempted be to be tabled. Is this a motion uh that this subcommittee issue a subpoena to the secretary of the treasury to return to the majority and minority of the subcommittee on national security illicit finance and international financial institutions of the committee on financial
▶ 2:05:03services. all complete and unredacted documents related to Jeffrey Epstein or individuals associated with Jeffrey Epstein including but not limited to wire transfers bank accounts and other transactions other accounts and account holders that were parties to any such
▶ 2:05:27the gentleman general lady yield for an answer it it is not a question on the subpoena it is a question on tableabling the subpoena and the clerk will report.
▶ 2:05:39The eyes's are eight and the nazs are
▶ 2:05:43A majority having voted in favor, the motion to table is agreed to. I would like to thank Director Gaki for her testimony today. Without objection, all members will have five legislative days to submit additional written questions for the witness to the chairman. Questions will be forwarded to the witness for her response. Miss Gaki, please respond no later than October 14th, 2025. This hearing is adjourned.