WASHINGTON — The House Financial Services Committee on Thursday postponed a vote on legislation requiring companies to disclose their beneficial owners, as the bill's Democratic author continues to negotiate with the panel's top Republican.
At a markup where the committee passed a different anti-money-laundering bill, Rep. Carolyn Maloney, D-N.Y., said she would continue to work with Rep. Patrick McHenry, R-N.C., the ranking member, to build bipartisan support for beneficial ownership reform.
It was unclear whether the bill was in peril or will simply be voted on later. Nearly a year ago, an AML bill that included other reforms
“I am going to ask the chairlady to postpone the bill until later, in hopes of working with the ranking member,” said Maloney, who chairs the investor protection, entrepreneurship and capital markets subcomittee. “He indicated yesterday that he needs more time. … I hope that the ranking member will take this as a show of good faith and an indication of how serious I am about getting broad bipartisan support and getting it signed into law this Congress.”
To combat the money-laundering risk of shell companies, the bill would require the disclosure of beneficial owners at the time of incorporation. Banks support the move since it would absolve them of regulatory requirements to collect beneficial owner information from account holders.
McHenry said he does not believe that the committee has been given enough data from the Financial Crimes Enforcement Network to prove that the legislation’s burdens on small businesses would aide law enforcement in combating illicit finance, and that the legislation is “not currently in my view good.”
“This bill creates a new government repository of every small business in America,” McHenry said. “This is a massive new government regulation. If it is necessary to get terrorists in order to do this, that has not been proven.
“My deep frustration with this is not upon the willingness of the sponsor or [committee Chairwoman Maxine Waters] to hash out the details of this. It is the failure of the administration to provide said data to pass on a massive new small business requirement on every small business owner.”
Despite McHenry’s opposition, other Republicans on the committee support Maloney’s legislation, including Reps. Ann Wagner, R-Mo., and Blaine Luetkemeyer, R-Mo., who also serve as ranking members on two subcommittees.
“America is one of the easiest countries in the world in which to hide who actually owns and benefits from a business,” said Wagner, the No. 2 Republican on the committee. “I support this legislation. I support Ms. Maloney’s work to get this done and bring it to the floor and pass it into law. And I appreciate her accommodation to the ranking member.”
The committee voted unanimously in support of a separate bill sponsored by Emanuel Cleaver, R-Mo., to strengthen information-sharing between law enforcement and banks that invest in AML compliance.
The committee
McHenry sent a letter to Fincen earlier this week asking for more details on the impact of Maloney's legislation to combat illicit finance. But Waters said she believes the legislation is sufficiently thorough in addressing McHenry's concerns.
“I accept the fact that Ms. Maloney is bending over backwards to be cooperative and many of the questions that are being raised are answered in the bill if the bill is being read in depth and in the way that it should be,” Waters said.
Banking groups are still urging the committee to pass the legislation.
“We appreciate the committee’s engagement on these issues, and urge lawmakers to continue to advance legislation sponsored by Chairwoman Maloney that would require corporations and limited liability companies to self-report beneficial owners to FinCEN, a long overdue measure that would bring the U.S. in line with other countries and improve oversight,” said Rob Nichols, president and CEO of the American Bankers Association, in a statement.
At the markup, the committee also announced the formation of two task forces related to financial technology and artificial intelligence to help promote responsible innovation.
Rep. Stephen Lynch, D-Mass., will chair a task force on fintech, while Rep. Bill Foster, D-Ill., will chair a task force on artificial intelligence. Rep. French Hill, R-Ark., will be the lead Republican on both task forces.
