US Treasury Secretary Janet Yellen has told Congress President Biden’s first budget will seek a massive funding boost for the Financial Crimes Enforcement Network (FinCEN).
Her officials on Friday requested the FinCEN budget be boosted by 50pc to cover building a corporate ownership database and to implement the reforms of federal AML rules.
Congress recently required Fincen to implement a new system to collect information directly from startup companies about their true owners.
FinCEN “is tasked with building a massive database that collects and secures beneficial ownership information, but Congress has not yet provided any funding to do it,” Yellen said in a statement to the House Appropriations subcommittee hearing Thursaday.
The law passed in January mandates that companies at incorporation report their beneficial ownership to the agency. Banks applauded the bill since it will relieve them of current requirements to report their business customers’ true owners to Fincen.
Yellen also indicated that the budget would propose increased funding for CDFIs.
“These institutions are very effective at injecting capital into areas the financial sector hasn’t traditionally served well,” she said.
“However, it is challenging for the CDFI Fund to distribute greater resources and scale these programs without additional administrative funding.”
It is in sharp contrast to the Trump administration’s proposed 2021 budget which recommended eliminating funding for the CDFI Fund discretionary grant and direct loan programmes to save $248M.
But the former president’s 2021 budget also proposed an additional $1 million in funding for FinCEN, which it said would allow the agency to better “prevent and address financing of terrorism, money laundering and other crimes.”