Legislation that would toughen money-laundering rules is a priority of Wall Street banks, and lobbyists are busy working to get it passed by Congress even as the rest of Capitol Hill fixates on impeachment and the 2020 elections.
Yet the bill, which the Democratic-controlled House is set to vote on as soon as Tuesday, has also faced formidable foes toiling just as hard to weaken or block it. Opponents have included the National Federation of Independent Business and the American Bar Association.
The legislation would make it harder to use anonymous shell companies to break the law. Big banks favor the bill because they would no longer shoulder the full burden of reporting customer wrongdoing to law enforcement. Opponents say it threatens privacy, would create unnecessary burdens for small businesses and won’t actually do much to stop the bad guys. The Senate could take the measure up this year, though it’s not certain the bill will pass.
“We’re going to continue to lobby,” said Brad Close, head of public policy at the NFIB. “Who would benefit from this bill? It’s clearly big banks.”
The legislation would require companies to tell regulators the names of the owners of shell companies, information the Treasury Department would collect in a private database and law enforcement could use to help catch money launderers, tax evaders and other criminals.
Current rules are lax about requiring people setting up LLCs and other small firms to disclose who will benefit from the profits. Banks are required to report any suspicious activity, which can involve lots of paperwork and legal exposure that the banks would rather share responsibility for.
‘Pain Point’
“It’s a client pain point,” said Greg Baer, president of the Bank Policy Institute. “Clients dislike having their bank bug them every time they open a new account.”
Passage of the bill would be among his members’ biggest priorities in Congress this year, Baer said. Law enforcement groups also favor passage.
Dueling lobbyists have put Republicans and moderate Democrats in a tough spot, forcing them to choose between donors.