WASHINGTON - The House Financial Services Committee punted Wednesday on giving the Financial Crimes Enforcement Network enforcement and compliance monitoring powers and elevating the Treasury Department's Office of Terrorism and Financial Intelligence to the under secretary level.
"There is a dire need to improve our anti-money-laundering compliance system," Rep. Sue Kelly, R-N.Y., told the committee when she offered an amendment to make these changes to a bill intended to prevent the financing of terrorism.
The amendment was just one of nearly a dozen the committee considered Wednesday to a bill that will be incorporated into sweeping legislation the House will vote on soon to implement the recommendations of the 9/11 commission.
The core of the bill, which the committee approved in a voice vote Wednesday, would let creditors "net out" losses on derivatives contracts with companies that have filed for bankruptcy, enlist financial companies to block illegal Internet betting, fund new technology for Fincen, and make technical changes to a 3-year-old anti-laundering law.
It is not clear if the Internet gambling and netting provisions will remain in the bill as it winds its way through the legislative process.
Rep. Kelly's amendment was withdrawn after it met with opposition from the committee's Republican and Democratic leaders, who said the idea needed more scrutiny. They promised to consider it next year when the panel debates reauthorizing Fincen's budget.
"I'm not prepared to vote for legislation that creates more regulation for our banks," Rep. Spencer Bachus, the Alabama Republican who chairs the financial institutions subcommittee, said during debate on the amendment. "If there is one thing we're hearing from financial institutions, it is 'We've got enough regulations.' Yet you are authorizing a bunch of new auditors and compliance officers."
The committee accepted a number of generally noncontroversial amendments, including one that would ban bank examiners-in-charge for at least a year from going to work for the company they supervised in the previous 18 months.
House Financial Services rejected an effort led by Rep. Ed Royce, R-Calif., to prohibit banks from accepting Mexican matricula consular and other cards issued by foreign governments for customer identification. His amendment, which lost 47 to 22, would have limited the acceptable forms of identification for foreigners to a passport or an alien identification card.
The committee voted 58 to 10 to reject an amendment from Rep. Ron Paul, R-Tex., that would have limited the number of suspicious activity reports financial companies would have to file. Banks would have had to report suspicious activity to the government only if a bank employee had "probable cause to believe that the subject of the report is involved in terrorism, money laundering, or any other criminal activity."
Also on Wednesday, the panel easily approved by voice vote a bill to extend the government's temporary terrorism reinsurance program through 2007. The bill's future is unclear, as both the Treasury Department and Senate Banking Committee Chairman Richard Shelby oppose making a decision on extending the program until the government finishes a study next year on its effectiveness.
