[House Report 119-24]
[From the U.S. Government Publishing Office]
119th Congress } { REPORT
HOUSE OF REPRESENTATIVES
1st Session } { 119-24
======================================================================
FINANCIAL PRIVACY ACT OF 2025
_______
March 21, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 1602]
The Committee on Financial Services, to whom was referred
the bill (H.R. 1602) to require the Secretary of the Treasury
to provide for greater transparency and protections with regard
to Bank Secrecy Act reports, and for other purposes, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 3
Committee Consideration.......................................... 4
Related Hearings................................................. 4
Committee Votes.................................................. 5
Committee Oversight Findings..................................... 8
Performance Goals and Objectives................................. 8
Committee Cost Estimate.......................................... 8
New Budget Authority and CBO Cost Estimate....................... 8
Unfunded Mandates Statement...................................... 8
Earmark Statement................................................ 8
Federal Advisory Committee Act Statement......................... 9
Applicability to the Legislative Branch.......................... 9
Duplication of Federal Programs.................................. 9
Section-by-Section Analysis of the Legislation................... 9
Changes in Existing Law Made by the Bill, as Reported............ 10
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Financial Privacy Act of 2025''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Pursuant to the Bank Secrecy Act (``BSA''), the Secretary
of the Treasury, acting through the Financial Crimes
Enforcement Network (``FinCEN''), collects millions of reports
annually on the economic activity of ordinary Americans.
(2) Since 2001, FinCEN has applied the BSA to collect over
322,000,000 Currency Transaction Reports and more than
36,000,000 Suspicious Activity Reports, as well as nearly
5,000,000 Form 8300 Reports. In addition, FinCEN expects to
amass beneficial ownership information (``BOI'') from
32,000,000 companies in its initial year of collection, plus
5,000,000 additional companies implicated each year thereafter.
(3) The mass of reporting collected by FinCEN suggests that,
while certain BSA reports might prove useful to combat illicit
finance, the bulk of BSA-related data may possess little to no
nexus to legitimate law enforcement or intelligence purposes,
even as it encompasses highly sensitive details on the everyday
lives of Americans.
(4) By law, the Secretary of the Treasury must ensure the
security and confidentiality of BSA data. In a Notice of
Proposed Rulemaking from December 2022, FinCEN acknowledged
that ``BOI is highly sensitive information. FinCEN therefore
views it as critical to mitigate the risk of unauthorized
disclosure of BOI as much as possible.''.
SEC. 3. REPORTS TO CONGRESS; REVIEW OF PROTOCOLS FOR AGENCY ACCESS TO
REPORTS.
(a) In General.--Chapter 53 of title 31, United States Code, is
amended--
(1) in subchapter II, by inserting after section 5326 the
following:
``Sec. 5327. Reports to Congress; Review of protocols for agency access
to reports
``(a) Reports to Congress.--Not later than 180 days following the
date of the enactment of this section, and annually thereafter, the
Secretary of the Treasury shall submit to the Committee on Financial
Services of the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate a report containing the
following:
``(1) The number of reports, by type, filed each year with
the Financial Crimes Enforcement Network (`FinCEN') under this
subchapter since January 1, 2022.
``(2) The total number of reports filed under this subchapter
retained by FinCEN.
``(3) A description of any written protocols or guidance from
the Secretary to national security, law enforcement, or
intelligence agencies regarding agency access to, and retention
or dissemination of, information held by FinCEN from reports
filed under this subchapter, including--
``(A) a description of any updates to the protocols
or guidance during the reporting period;
``(B) the number of queries by such agencies to
access the information during the reporting period; and
``(C) any denials of requests for, or revocations of,
access by a national security, law enforcement, or
intelligence agency, or by any employee thereof, with a
description of the reasons for the denial or
revocation, as the case may be.
``(b) Review and Revision of Protocols.--In consultation with the
Director of National Intelligence and the Attorney General, the
Secretary of the Treasury shall annually review and, as appropriate,
revise any written protocols or guidance described under subsection (a)
for the purposes of--
``(1) better tailoring the collection, retention, and
dissemination of information filed under this subchapter to
authorized national security, law enforcement, or intelligence
objectives;
``(2) enforcing prohibitions against unauthorized disclosure
of such information; and
``(3) protecting fully the legal rights of all United States
persons, including freedoms, civil liberties, and privacy
rights guaranteed by Federal law.
``(c) Congressional Requests; Notice of Changes.--
``(1) Requests for information.--Upon request of the chair or
ranking member of the Committee on Financial Services of the
House of Representatives or the Committee on Banking, Housing,
and Urban Affairs of the Senate, the Secretary shall provide a
copy of any written protocols or guidance described in
subsection (a)(3).
``(2) Notice of revisions.--Not later than 30 days after
revising any written protocols or guidance described in
subsection (a)(3), the Secretary shall provide a copy of such
revised written protocols or guidance to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate.''; and
(2) in the table of contents for such chapter, by inserting
after the item relating to section 5326 the following:
``5327. Reports to Congress; Review of protocols for agency access to
reports.''.
(b) Sunset.--On the date that is the end of the 7-year period
beginning on the date of enactment of this Act--
(1) section 5327 of title 31, United States Code, is
repealed; and
(2) the table of contents for chapter 53 of title 31, United
States Code, is amended by striking the item relating to
section 5327.
Purpose and Summary
Introduced on February 26, 2025, by Representative Warren
Davidson, H.R. 1602, the Financial Privacy Act of 2025,
requires the Department of the Treasury to annually report to
Congress details of reports made to the Financial Crimes
Enforcement Network (FinCEN). FinCEN collects reports on
suspicious financial transactions and the beneficial ownership
of companies in order to detect financial crimes, including
money laundering. Under the bill, FinCEN must report on the
number and types of reports and whether they are retained by
FinCEN, any guidance regarding outside agency access to these
reports, agency requests for these reports, and any denials of
access. Treasury must annually review access guidance and
revise as appropriate to protect the legal rights of U.S.
persons, among other objectives.
Background and Need for Legislation
Under legal provisions collectively referred to as the Bank
Secrecy Act (BSA), FinCEN requires financial institutions and
other businesses to submit reports that may assist the Treasury
Department's anti-money laundering/combatting the financing of
terrorism (AML/CFT) efforts. These reports include suspicious
activity reports (SARs) and currency transaction reports
(CTRs). BSA requirements also include beneficial reporting data
as mandated by the Corporate Transparency Act.
Since 2001, FinCEN has collected more than 350 million SARs
and CTRs. Each day, FinCEN receives approximately 55,000 BSA
records. It expects to receive beneficial ownership information
from 32 million companies in its initial year of implementation
in addition to the current BSA records. The Financial Privacy
Act will provide important insights into the scope of FinCEN's
data collection and allow for stronger congressional oversight.
On August 31, 2023, Treasury's Office of Inspector General
(IG) issued an audit of FinCEN's ``suppression'' process. This
process is supposed to restrict access to inaccurate,
duplicative, or sensitive data. According to the IG, ``FinCEN
did not: (1) timely process and adequately document the
disposition of suppression requests, to include notifying
requesters in writing; and (2) ensure that bulk data recipients
removed suppressed records from their respective
databases.''\1\ The Financial Privacy Act will enhance
Congress's oversight of protocols governing FinCEN's data
protocols.
---------------------------------------------------------------------------
\1\Office of Inspector General, Dep't of the Treasury, OIG-23-030,
Audit of FinCEN's Management of BSA Data--Suppression Report (2023).
---------------------------------------------------------------------------
Committee Consideration
118TH CONGRESS
On September 14, 2023, Representative French Hill (R-AR)
introduced H.R. 5485, the Financial Privacy Act of 2023, with
Representative James Himes (D-CT) as original cosponsor.
Representative Brad Sherman (D-CA) was subsequently added as a
cosponsor. The bill was referred solely to the Committee on
Financial Services.
On April 27, 2023, the Subcommittee on National Security,
Illicit Finance, and International Financial Institutions held
a hearing entitled ``Oversight of the Financial Crimes
Enforcement Network (FinCEN) and the Office of Terrorism and
Financial Intelligence (TFI).'' The witnesses were: the
Honorable Brian E. Nelson, Under Secretary for Terrorism and
Financial Intelligence at the Department of the Treasury, and
Mr. Himamauli Das, Acting Director for the Financial Crimes
Enforcement Network. A draft version of H.R. 5485 was
considered in the hearing.
On September 20, 2023, the Committee on Financial Services
met in open session and ordered H.R. 5485 to be reported
favorably to the House of Representatives by a recorded vote of
47 yeas and 0 nays, a quorum being present. (Record Vote No.
FC-100). Before the question to report was called, the
Committee adopted an amendment in the nature of a substitute
offered by Mr. Hill by a voice vote. H. Rept. 118-317 was filed
on December 13, 2023.
119TH CONGRESS
On February 26, 2025, Representative Warren Davidson (R-OH)
introduced the Financial Privacy Act of 2025, with
Representative Jim Himes (D-CT) as original cosponsor. The bill
was referred solely to the Committee on Financial Services.
Related Hearings
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearing was used to
develop H.R. 1602:
The Full Committee held a hearing on February 25, 2025,
titled ``Examining Policies to Counter China.'' A draft version
of H.R. 1602 was considered in this hearing. The following
witnesses appeared: Mr. John Miller, Senior Vice President of
Policy, Trust, Data, and Technology, and General Counsel of the
Information Technology Industry Council; Mr. Nicholas McMurray,
Managing Director of International and Nuclear Policy at
ClearPath; Mr. John Cassara, a retired United States Treasury
Department Special Agent; Mr. Martin Muhleisen, a Nonresident
Senior Fellow at the GAO Economic Center at the Atlantic
Council; and Dr. Rush Doshi, the C.V. Starr Senior Fellow for
Asian Studies, Director of the China Strategy Initiative at the
Council on Foreign Relations, and an Assistant Professor at
Georgetown University. Among the discussion regarding Bank
Secrecy Act provisions, Cassara highlighted the need to refine
financial intelligence reporting requirements and to fund
technology investments to make more efficient use of Suspicious
Activity Reports.
The Committee on Financial Services met in open session on
March 5, 2025 to consider, among others, H.R. 1602.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
On March 5, 2025, the Committee ordered H.R. 1602, as
amended, to be reported favorably to the House by a recorded
vote of 48 yeas to 0 nays, a quorum being present. (Record Vote
No. FC-017).
The Committee considered the following amendments to H.R.
1602:
Representative Davidson offered an amendment
in the nature of a substitute that made technical
changes. The amendment was adopted by a voice vote.
Representative Sean Casten (D-IL) offered an
Amendment (No. 1) to require the Department of the
Treasury to identify the persons who have access to
Treasury payment systems, authorities under which
access was granted, and to disclose access rights,
employment details, screening and training requirements
these persons were subject to, changes to access
protocols, and related memoranda of understanding
granting access. The amendment was defeated by a
recorded vote of 19 yeas to 29 nays, a quorum being
present. (Record Vote No. FC-016).
Committee Oversight Findings
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 1602 is strengthen
Congressional oversight of the use and safeguarding of
Americans' personally identifiable information by requiring the
Department of the Treasury to report to Congress annually the
details of reports made to FinCEN and to require Treasury to
annually review access guidance and revise as appropriate to
protect the legal rights of U.S persons, among other
objectives.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 1602.
The Committee has requested but not received a cost
estimate from the Director of the Congressional Budget Office.
However, pursuant to clause 3(d)(1) of rule XIII of the House
of Representatives, the Committee will adopt as its own the
cost estimate by the Director of the Congressional Budget
Office once it has been prepared.
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
Unfunded Mandates Statement
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Committee will adopt the estimate once
it has been prepared by the Director.
Earmark Statement
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the resolution and states that the provisions
of the bill do not contain any congressional earmarks, limited
tax benefits, or limited tariff benefits within the meaning of
the rule.
Federal Advisory Committee Act Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This Act may be cited as the ``Financial Privacy Act of
2025.''
Section 2. Findings
The Congress finds:
(1) The Financial Crimes Enforcement Network (FinCEN)
collects millions of reports annually on the economic activity
of ordinary Americans through the Bank Secrecy Act (BSA).
(2) Since 2001, FinCEN has collected over 322,000,000
Currency Transaction Reports, and 5,000,000 Form 8300 Reports.
In addition, FinCEN expects to collect beneficial ownership
information (BOI) from 32,000,000 companies in its initial year
of collection, and an additional 5,000,000 per year thereafter.
(3) The bulk of data collected by FinCEN possesses little
or no nexus to legitimate law enforcement or intelligence
purposes yet encompasses highly sensitive details of citizens.
(4) The Secretary of the Treasury must ensure the security
and confidentiality of data collected. FinCEN has acknowledged
that BOI is highly sensitive information.
Section 3. Reports to Congress; Review of protocols for agency access
to reports
Section 3 requires an annual report to Congress on data
collected and retained by the Secretary of the Treasury under
the Bank Secrecy Act. In addition, it requires the Secretary to
report on protocols governing the retention and dissemination
of this data, as well as notify Congress of any updates to the
protocols. It requires an annual review of the protocols by the
Secretary, including for the purpose of safeguarding civil
liberties and privacy rights.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
TITLE 31, UNITED STATES CODE
* * * * * * *
SUBTITLE IV--MONEY
* * * * * * *
CHAPTER 53--MONETARY TRANSACTIONS
SUBCHAPTER I--CREDIT AND MONETARY EXPANSION
Sec.
5301. Buying obligations of the United States Government.
* * * * * * *
SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS
* * * * * * *
5327. Reports to Congress; Review of protocols for agency access to
reports.
* * * * * * *
SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS
* * * * * * *
Sec. 5327. Reports to Congress; Review of protocols for agency access
to reports
(a) Reports to Congress.--Not later than 180 days following
the date of the enactment of this section, and annually
thereafter, the Secretary of the Treasury shall submit to the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate a report containing the following:
(1) The number of reports, by type, filed each year
with the Financial Crimes Enforcement Network
(``FinCEN'') under this subchapter since January 1,
2022.
(2) The total number of reports filed under this
subchapter retained by FinCEN.
(3) A description of any written protocols or
guidance from the Secretary to national security, law
enforcement, or intelligence agencies regarding agency
access to, and retention or dissemination of,
information held by FinCEN from reports filed under
this subchapter, including--
(A) a description of any updates to the
protocols or guidance during the reporting
period;
(B) the number of queries by such agencies to
access the information during the reporting
period; and
(C) any denials of requests for, or
revocations of, access by a national security,
law enforcement, or intelligence agency, or by
any employee thereof, with a description of the
reasons for the denial or revocation, as the
case may be.
(b) Review and Revision of Protocols.--In consultation with
the Director of National Intelligence and the Attorney General,
the Secretary of the Treasury shall annually review and, as
appropriate, revise any written protocols or guidance described
under subsection (a) for the purposes of--
(1) better tailoring the collection, retention, and
dissemination of information filed under this
subchapter to authorized national security, law
enforcement, or intelligence objectives;
(2) enforcing prohibitions against unauthorized
disclosure of such information; and
(3) protecting fully the legal rights of all United
States persons, including freedoms, civil liberties,
and privacy rights guaranteed by Federal law.
(c) Congressional Requests; Notice of Changes.--
(1) Requests for information.--Upon request of the
chair or ranking member of the Committee on Financial
Services of the House of Representatives or the
Committee on Banking, Housing, and Urban Affairs of the
Senate, the Secretary shall provide a copy of any
written protocols or guidance described in subsection
(a)(3).
(2) Notice of revisions.--Not later than 30 days
after revising any written protocols or guidance
described in subsection (a)(3), the Secretary shall
provide a copy of such revised written protocols or
guidance to the Committee on Financial Services of the
House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate.
[Section 3(a) of H.R. 1602 (as reported) provides for an
amendment to subchapter II of chapter 53 of title 31, United
States Code by inserting after section 5326 a new section 5327
(and by conforming the table of contents accordingly) shown
previous. Subsection (b) of such section 3 of H.R. 1602 (as
reported) provides: ``[o]n the date that is the end of the 7-
year period beginning on the date of enactment of this Act,
section 5327 of title 31, United States Code, is repealed''
(and strikes the item relating to such section in the table of
contents). On such date, section 5327 (represented below in
roman typeface) and the item relating to such section in the
table of contents (as added by section 3(a) of H.R. 1602 (as
reported)) are repealed as follows:]
[Sec. 5327. Reports to Congress; Review of protocols for agency access
to reports
[(a) Reports to Congress.--Not later than 180 days following
the date of the enactment of this section, and annually
thereafter, the Secretary of the Treasury shall submit to the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate a report containing the following:
[(1) The number of reports, by type, filed each year
with the Financial Crimes Enforcement Network
(``FinCEN'') under this subchapter since January 1,
2022.
[(2) The total number of reports filed under this
subchapter retained by FinCEN.
[(3) A description of any written protocols or
guidance from the Secretary to national security, law
enforcement, or intelligence agencies regarding agency
access to, and retention or dissemination of,
information held by FinCEN from reports filed under
this subchapter, including--
[(A) a description of any updates to the
protocols or guidance during the reporting
period;
[(B) the number of queries by such agencies
to access the information during the reporting
period; and
[(C) any denials of requests for, or
revocations of, access by a national security,
law enforcement, or intelligence agency, or by
any employee thereof, with a description of the
reasons for the denial or revocation, as the
case may be.
[(b) Review and Revision of Protocols.--In consultation with
the Director of National Intelligence and the Attorney General,
the Secretary of the Treasury shall annually review and, as
appropriate, revise any written protocols or guidance described
under subsection (a) for the purposes of--
[(1) better tailoring the collection, retention, and
dissemination of information filed under this
subchapter to authorized national security, law
enforcement, or intelligence objectives;
[(2) enforcing prohibitions against unauthorized
disclosure of such information; and
[(3) protecting fully the legal rights of all United
States persons, including freedoms, civil liberties,
and privacy rights guaranteed by Federal law.
[(c) Congressional Requests; Notice of Changes.--
[(1) Requests for information.--Upon request of the
chair or ranking member of the Committee on Financial
Services of the House of Representatives or the
Committee on Banking, Housing, and Urban Affairs of the
Senate, the Secretary shall provide a copy of any
written protocols or guidance described in subsection
(a)(3).
[(2) Notice of revisions.--Not later than 30 days
after revising any written protocols or guidance
described in subsection (a)(3), the Secretary shall
provide a copy of such revised written protocols or
guidance to the Committee on Financial Services of the
House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate.]
* * * * * * *
[all]