Beautiful Virgin Islands

Saturday, Aug 22, 2026

A New Law Will Close The Loophole That Lets Criminals Launder Money Through US Banks

A New Law Will Close The Loophole That Lets Criminals Launder Money Through US Banks

The law would force shell companies, and criminals who may hide behind them, into view — if it survives Trump’s veto.
In a move that could make it much harder for criminals to launder money through US banks, Congress has passed legislation that would require anonymous shell companies to disclose their true owners.

The action, which still faces a veto threat from President Donald Trump, comes three months after the FinCEN Files, an expansive investigation by BuzzFeed News and the International Consortium of Investigative Journalists, showed that shell companies are a cornerstone of fraud and financial corruption.

Business interests and their allies in Congress had long opposed efforts to unmask these secretive corporate entities because they said it would place unfair burdens on legitimate companies. But rising concerns about money laundering and terrorist financing, combined with reworking the legislation to be more business-friendly, gradually turned the tide.

The legislation was included in the National Defense Authorization Act (NDAA), which passed the Senate by a vote of 84–3 Friday. Earlier in the week, it passed the House by a more than 4 to 1 margin.

Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee, said the stories from the FinCEN Files series “underscored that we need to strengthen, reform, and update our nation’s anti-money laundering laws.”

Congress’s action on shell companies, he said in a statement, “will finally update and reform our tools to crack down on anonymous shell companies and on big banks that enable criminals or have lax anti-money laundering compliance programs. We know that criminals have long been adjusting their tactics to get around our current laws. This bill will enable us to get ahead of them, and stay ahead of them.”

Senate Intelligence Committee Vice Chair Sen. Mark Warner said it is "past time to put an end to the secrecy that allows drug cartels, human traffickers, arms dealers, terrorists and kleptocrats to exploit the United States' banking system in order to carry out anti-American activities."

He added that "the current holes in our financial system pose a serious threat to national security. "

The new measure is part of a sweeping defense spending bill, which Trump has promised to veto unless it repeals Section 230 of the Communications Decency Act, which shields social media companies from liability for content that users post on their platform. Trump and many Congressional Republicans allege that Section 230 has allowed social media companies to censor and silence conservative voices.

The NDAA passed with more than two-thirds support in each chamber, which would be enough to override a presidential veto. But it is not clear whether enough Republicans will stick with their support of the bill in defiance of a Trump veto attempt.

Legislation in the NDAA also addresses many of the other issues identified in the FinCEN Files.

If signed into law, it would require the government to report on how law enforcement agents use suspicious activity reports, documents sent by banks to the Treasury Department when they detect possible financial misconduct.

The Justice Department would have to file yearly reports justifying its use of deferred prosecution agreements — a type of deal that banks regularly cut with the government to avoid a criminal trial when they run afoul of anti-money laundering laws.

And the law will protect those who blow the whistle on misconduct from retaliation and offer them financial rewards for stepping forward.

The bill also requires FinCEN — the Financial Crimes Enforcement Network, a division of the Treasury Department — to study new technologies to identify criminal money flows and to improve communication with the private sector.

The Financial Accountability and Corporate Transparency Coalition, a group that advocates for a fair tax system and has pushed for this legislation, applauded the action in Congress. “It has been decades since our nation’s anti-money laundering laws were updated,” the group said in a statement this week. “Over time, rogue nations, criminals, and kleptocrats have developed ever more sophisticated strategies, but national security and law enforcement officials are currently working with outdated and insufficient tools to counter these emerging threats.”

At present, anonymous shell companies can be set up with less disclosure than what is required to get a library card. These companies can be used to hide wealth or launder the proceeds of crime through legitimate assets.

Requiring companies to disclose who owns them and who profits off them was first proposed in Congress in 2008. Various bills have been proposed since then, but failed. After years of debate on the issue, and years of failure to get legislation passed, momentum for the banking reforms built over the last 12 months as compromises were made and coalitions built.

Earlier proposals would have forced companies to disclose their ownership publicly. Under the new legislation, ownership information would be shared only with FinCEN.

Companies with more than 20 employees and at least $5 million in annual sales, as well as a physical presence in the United States, would be exempt under the assumption they’re legitimate businesses rather than shell companies.

Those who fail to disclose their ownership or provide false information face fines of up to $10,000 and up to two years imprisonment. The legislation passed this week also establishes a new FinCEN whistleblower program for financial crimes.

“Providing the means for whistleblowers to report to the government is the best way to incentivize insiders to come forward with the necessary information,” said Poppy Alexander, a lawyer specializing in whistleblower cases for the firm of Constantine Cannon. “This new law goes a long way towards providing a safe and secure forum for insiders to help law enforcement connect the dots.”

The broad coalition favoring the legislation included labor unions, the US Chamber of Commerce, and the banking industry. Banks, in particular, were a major force lobbying in favor of the corporate transparency legislation.

Banks currently bear the burden of reporting suspicious financial activity to FinCEN and are looking to push some responsibility onto the corporations themselves. These reports are a major expense for banks. The Banking Policy Institute, whose members include both domestic banks and large foreign banks doing business in the US, said these financial institutions employ 14,000 people dedicated to compliance.

The National Federation of Independent Business was the loudest voice arguing against the legislation. Kevin Kuhlman, its vice president of federal government affairs, said the banks don’t actually care about cracking down on money laundering.

“Banks are attempting to offload their regulatory burden onto small businesses. My fear is that bad actors will not begin filling out honest paperwork, and honest business owners will become unsuspecting criminals,” he said.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Bitcoin Surges Toward $80,000 as Short Squeeze and ETF Inflows Ignite Crypto Rally
Twenty-Nine US States Take Meta to Trial Over Alleged Child Addiction on Instagram and Facebook
Former Scottish National Party Executive Peter Murrell Jailed for Five Years Over £400,000 Embezzlement
Moderna and Merck's Personalized Cancer Vaccine Succeeds in Historic Late-Stage Melanoma Trial
Prince Harry and Meghan to Move Back to Britain With Their Children
England and Wales Have Fewer Than 1,800 Prison Places Left for Men
Suspected People Smuggler Arrested After Investigation Identified Him
Children's Doctors Warn That Vaping Can Lead Young People to Smoking
Hundreds of Thousands of Students Receive GCSE and Vocational Results Across England, Wales and Northern Ireland
Here Is What Can Never Happen in Your Country: Taiwan Is Giving Money to All Its People Because It Collected Too Much Tax
UK Inflation Rises to 2.9% as Energy Bills Jump
UK Issues New Conduct Guide for Asylum Seekers on Consent and Respect
A Sleepless Night on Wall Street: Nasdaq to Begin Nearly Round-the-Clock Trading
"The First in the World": 69-Year-Old Protested Artificial Intelligence—and Went to Jail
Ukraine's Ousted Defence Minister Calls for Wartime Presidential Election
China’s Lifelike AI Humans Move From Livestreams Into Real-World Service Roles
Sarah Ferguson Reportedly Retreats to Late Ex-Boyfriend's Swiss Chalet
Cristiano Ronaldo and Georgina Rodríguez Sign Prenup Protecting Their Separate Fortunes
Thieves Steal Antonello da Messina Renaissance Masterpieces From Sicilian Museum
Better.com Founder Who Fired 900 Employees on Zoom Is Ousted as CEO
Italian Speed Camera Issues Nearly 32,000 Fines in 10 Weeks, Worth More Than €3 Million
AI Manager at San Francisco Store Recommends Firing Human Employee
Google Launches Pixel 11 With Gemini AI at the Center of Its Hardware Strategy
Reform UK Unveils Plan to Cut Welfare Spending by More Than £50 Billion a Year
Prime Minister Andy Burnham Praised Extinction Rebellion for Doing a 'Great Service'
UK Wildfire Phone Alert Triggers Backlash as Users Switch Off Emergency Warnings
Heathrow Roads Reopen After Burst Water Main Floods Access to Terminals 2 and 3
Former NBA Players Enes Kanter Freedom and Royce White Say They Will Enter 2027 WNBA Draft
Former Cambridge Professor Jason Arday Found Dead Days After Resigning Amid Plagiarism Row
US Appeals Court Rules AI Agent's Website Actions Are Legally Attributed to the User
France's Constitutional Council Blocks Social Media Ban for Children Under 15
Liechtenstein Changes Royal Succession Rules to Allow Women to Inherit the Throne
Women Allege Rape and Sexual Abuse at British Army College for Teenage Recruits
Minnesota: Two independent investigators posed as Muslims (one wearing a burqa) and showed how they could vote in elections without identification.
China’s Kimi Launches AI-Focused Credit Card With Agricultural Bank of China and American Express
Former Labour Adviser Arrested on Suspicion of Spying for China Held Privileged Access as Top Party Donor
Turkish Parliament Passes Landmark Bill Granting Conditional Amnesty to Disarmed PKK Members
Donald Trump Warns FIFA Against Ousting Gianni Infantino Amid Revolt by Global Football Leaders
Jeff Bezos Joins Investor Group Closing In on $6 Billion Liverpool FC Stake
UK Councils to Receive Sweeping Planning Powers to Ban New Vape and Betting Shops
Russia’s A7 Builds a State-Linked Payments Network Beyond Western Sanctions
Hyper-Realistic Reborn Dolls Draw Collectors Seeking Comfort and Craft
Gen Z Cuts Back on Dating as a Night Out Nears $200
Patients Turn to Artificial Intelligence for Therapy as Psychiatrists Warn of Privacy and Clinical Risks
Couples Embrace ‘Sleep Divorce’ to Protect Rest and Reduce Tension
Meta Ordered to Pay $567 Million and Change Facebook and Instagram Safeguards for Children
Up to only 10 Months in Prison for Swedish Officer’s Murderer Sparks Anger
Success: Nvidia Turned Gaming Chips Into the Engine of the AI Boom
Jorge Messi, Lionel Messi’s Father and Longtime Agent, Dies at 68
AI’s Next Bottleneck Is Power, Not Just Nvidia Chips
×