Congressional Bills,H.J. Res. 213 (IH) – Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Financial Crimes Enforcement Network relating to Financial Crimes Enforcement Network: Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers.

H.J. Res. 213 (IH) – Joint Resolution Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Financial Crimes Enforcement Network relating to Financial Crimes Enforcement Network: Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers.

Introduced: March 8, 2023 Sponsor: Rep. Patrick McHenry (R-NC) Status: Referred to the House Committee on Financial Services

Summary:

The joint resolution would disapprove the Financial Crimes Enforcement Network’s (FinCEN) rule on anti-money laundering and countering the financing of terrorism (AML/CFT) requirements for registered investment advisers (RIAs) and exempt reporting advisers (ERAs).

The FinCEN rule, which was issued in December 2022, requires RIAs and ERAs to establish and implement AML/CFT programs and to file suspicious activity reports (SARs). The rule also requires RIAs and ERAs to register with FinCEN.

Arguments in Favor:

  • Unnecessary burden: Opponents of the rule argue that it would impose an unnecessary burden on RIAs and ERAs, particularly smaller firms.
  • Duplication: They also argue that the rule duplicates existing AML/CFT requirements for financial institutions.
  • Diminished privacy: Opponents also raise concerns that the rule would diminish investor privacy by requiring RIAs and ERAs to collect and retain personal information.

Arguments Against:

  • Financial crime prevention: Supporters of the rule argue that it is necessary to prevent money laundering and terrorist financing.
  • International compliance: They also argue that the rule is necessary to comply with international AML/CFT standards.
  • Investor protection: Supporters also argue that the rule will protect investors by ensuring that RIAs and ERAs are subject to the same AML/CFT requirements as other financial institutions.

Prospects:

The resolution is unlikely to be approved by the Democrat-controlled Senate. However, it could put pressure on FinCEN to modify or withdraw the rule.

Additional Information:

  • The resolution has 170 co-sponsors, all Republicans.
  • The FinCEN rule is scheduled to take effect on May 11, 2023.
  • The resolution is supported by the Investment Adviser Association, the Securities Industry and Financial Markets Association, and the American Securities Association.
  • The resolution is opposed by the Treasury Department and the Financial Crimes Enforcement Network.

H.J. Res. 213 (IH) – Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Financial Crimes Enforcement Network relating to Financial Crimes Enforcement Network: Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers.

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