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Fincen needs funding boost to implement new database, Yellen says

WASHINGTON— Treasury Secretary Janet Yellen indicated to lawmakers Thursday that President Biden’s first proposed budget will request more funding for the Financial Crimes and Enforcement Network and community development financial institutions.

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 prepared remarks for a House Appropriations subcommittee hearing. Biden’s budget is expected to be released Friday.

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.

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,” said Treasury Secretary Janet Yellen.

Bloomberg News

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.”

Conversely, the Trump administration’s proposed 2021 budget recommended eliminating funding for the CDFI Fund discretionary grant and direct loan programs, which it said would save $248 million in spending.

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.”


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