Federal

FinCEN Modernization Act of 2023

Source: Congress.gov · 1,141 words in original text

What This Bill Does

This bill directs the Financial Crimes Enforcement Network, also known as FinCEN (the federal agency that tracks financial crimes), to modernize how it researches and develops new tools. The bill allows FinCEN to establish programs that keep the agency informed about new technologies like machine learning (computer systems that learn from data) and data analytics (studying information to find patterns).

Who It Affects

FinCEN (the federal agency that enforces laws against financial crimes). Other federal agencies, state and local governments, educational institutions, private companies, self-regulatory organizations (nonprofit groups that set industry standards), and foreign governments may also be affected if they work with FinCEN on these programs.

Key Provisions

• FinCEN must establish research and development programs that inform the agency about technological advances like machine learning and data analytics to detect illegal financial activity (Sec. 2(m)(1)(A)). • FinCEN can use special contracting arrangements called "other transaction authority" that don't follow standard government contract rules when necessary for these modernization efforts (Sec. 2(m)(2)(A)). • FinCEN can accept donations, gifts, or access to property or services from various entities for five years starting from when this bill becomes law (Sec. 2(m)(2)(B)). • FinCEN must submit a yearly report to Congress within 60 days after each fiscal year ends describing all special contracts and donations it received (Sec. 2(m)(3)).

What Changes

If this bill becomes law, FinCEN gains new authority to enter into special agreements outside normal federal contracting rules and to accept gifts and donations from government agencies, states, companies, and foreign entities. The agency will have more flexibility to work with technology developers to explore new tools for monitoring cryptocurrencies (digital money) and other emerging financial technologies.

Important Definitions

The bill does not explicitly define key terms used in its text.

I 118TH CONGRESS 1ST SESSION H. R. 370 To amend title 31, United States Code, to modernize the research, develop- ment, information sharing, and acquisition process of the Financial Crimes Enforcement Network, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 17, 2023 Mr. DONALDS introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend title 31, United States Code, to modernize the research, development, information sharing, and acquisi- tion process of the Financial Crimes Enforcement Net- work, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘FinCEN Moderniza- 4 tion Act of 2023’’. 5 VerDate Sep 11 2014 04:21 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H370.IH H370 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 370 IH SEC. 2. MODERNIZING THE RESEARCH, DEVELOPMENT, IN- 1 FORMATION SHARING, AND ACQUISITION 2 PROCESS AUTHORITIES OF THE FINANCIAL 3 CRIMES ENFORCEMENT NETWORK (FINCEN). 4 Section 310 of title 31, United States Code, is 5 amended by adding at the end the following: 6 ‘‘(m) MODERNIZING THE RESEARCH, DEVELOP- 7 MENT, INFORMATION SHARING, AND ACQUISITION PROC- 8 ESS.— 9 ‘‘(1) IN GENERAL.—FinCEN shall establish 10 and maintain research, development, and informa- 11 tion sharing programs that further the purposes and 12 objectives of the laws administered by FinCEN, in- 13 cluding programs that— 14 ‘‘(A) inform FinCEN of important techno- 15 logical advances and innovations like machine 16 learning and data analytics that help safeguard 17 financial systems and detect illicit activity; 18 ‘‘(B) facilitate an environment where these 19 technological advances and innovations may be 20 explored by developers and FinCEN to evaluate 21 potential benefits for the financial industry; 22 ‘‘(C) identify areas where FinCEN should 23 adapt to facilitate these technological advances 24 and innovations, and encourage the develop- 25 ment of novel tools that are currently not avail- 26 VerDate Sep 11 2014 04:21 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H370.IH H370 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 370 IH able for use by FinCEN that would benefit fi- 1 nancial systems monitored by FinCEN; 2 ‘‘(D) ensure that FinCEN has the nec- 3 essary technology to monitor cryptocurrencies 4 and other emerging financial technologies for 5 their potential use in money laundering and 6 cyber and data security breaches; and 7 ‘‘(E) facilitate FinCEN’s ability to ex- 8 change and use information between other of- 9 fices and bureaus of the Department of the 10 Treasury, as well as other departments within 11 the Federal Government. 12 ‘‘(2) AUTHORIZED MEANS.—Notwithstanding 13 any other provision of law, FinCEN may do the fol- 14 lowing to accomplish the requirements described in 15 paragraph (1): 16 ‘‘(A) OTHER TRANSACTION AUTHORITY.— 17 FinCEN may enter into and perform trans- 18 actions (other than a standard contract) with 19 any agency or instrumentality of the United 20 States, or with any State, territory, or posses- 21 sion of the United States, or with any political 22 subdivision thereof, or with any person, firm, 23 association, corporation, educational institution, 24 self-regulatory organization, foreign govern- 25 VerDate Sep 11 2014 04:21 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H370.IH H370 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 370 IH ment, international organization, or other enti- 1 ty, on such terms and conditions as the Direc- 2 tor of FinCEN determines appropriate if— 3 ‘‘(i) the transaction is used only for 4 the requirements described in paragraph 5 (1); 6 ‘‘(ii) FinCEN endeavors to use a com- 7 petitive process, where appropriate, when 8 determining the parties to the transaction; 9 and 10 ‘‘(iii) the Director makes a written de- 11 termination that using a standard contract 12 to do so is either not feasible or not appro- 13 priate. 14 ‘‘(B) GIFT ACCEPTANCE AUTHORITY.— 15 During the 5-year period that begins with the 16 date of enactment of this subsection, FinCEN 17 may solicit, accept, and utilize any contribution, 18 provision of access, gift, or donation of tangible 19 or intangible property or service that the Direc- 20 tor determines appropriate, from any agency or 21 instrumentality of the United States, or any 22 State, territory, or possession of the United 23 State, or any political subdivision thereof, or 24 any person, firm, association, corporation, edu- 25 VerDate Sep 11 2014 04:21 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H370.IH H370 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 370 IH cational institution, self-regulatory organization, 1 or other entity, if— 2 ‘‘(i) the property or service is used 3 only for the requirements described in 4 paragraph (1); and 5 ‘‘(ii) the Director makes a written de- 6 termination that accepting the contribu- 7 tion, provision of access, gift, or donation 8 is consistent with fulfilling such require- 9 ments, and that using the standard con- 10 tract or other transaction to do so is nei- 11 ther feasible nor appropriate. 12 ‘‘(3) ANNUAL REPORT.—Not later than 60 days 13 after the end of each fiscal year, FinCEN shall sub- 14 mit to the Committee on Banking, Housing, and 15 Urban Affairs of the Senate and the Committee on 16 Financial Services of the House of Representatives 17 a report on all transactions entered into, and all 18 contributions, provisions of access, gifts, or dona- 19 tions accepted under paragraph (2), including— 20 ‘‘(A) a brief description of the rationale for 21 and purpose of each transaction, contribution, 22 provision of access, gift, or donation, with an 23 explanation of its potential utility to FinCEN, 24 VerDate Sep 11 2014 04:21 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H370.IH H370 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 370 IH as well as the current status of all related 1 projects; 2 ‘‘(B) FinCEN’s justification for why it was 3 not feasible or appropriate to use the standard 4 contract with respect to that subject; 5 ‘‘(C) in the case of a transaction other 6 than a contribution, provision of access, gift, or 7 donation, an explanation of FinCEN’s efforts to 8 use a competitive process, or the reason why 9 such a process was not appropriate; and 10 ‘‘(D) a description of all sums expended by 11 FinCEN in connection with a transaction and, 12 if readily available, the value of any contribu- 13 tion, provision of access, gift, or donation.’’. 14 Æ VerDate Sep 11 2014 04:21 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H370.IH H370 pbinns on DSKJLVW7X2PROD with $$_JOB

Important: This plain English summary was generated by AI and is provided for informational purposes only. It is not legal advice. Always consult the official bill text on Congress.gov or a qualified attorney for legal matters.