Reported by ELIZABETH MEEHAN

Most Americans have now heard about Project 2025, even if they only know those two words and nothing from the 900 pages of policies that will impact every person living in the United States. One area that has been overlooked is its plan for the US anti-money laundering regime. 

It’s a massive problem: Nasdaq estimated in 2023 that “$3.1 trillion in illicit funds flowed through the global financial system.” Many of these funds go through the US into residential and commercial real estate, drug and human trafficking networks, and cybercrime and fraud schemes. Project 2025’s one-page anti-money laundering plan would cripple the government’s ability to address these threats. 

Project 2025 references two policy areas: anti-money laundering and countering the financing of terrorism (AML-CFT) and the Corporate Transparency Act. US AML-CFT policy is largely carried out by the Financial Crimes Enforcement Network (FinCEN) as part of the Treasury. Project 2025 notes that FinCEN is “a relatively small bureau … with approximately 285 employees and a FY 2022 budget of $173 million” and “makes a significant contribution to law enforcement efforts.” 

FinCEN cost under 0.00003% of the 2022 US budget and imposed tens of millions of dollars in civil penalties. Direct enforcement actions recovered between 49% and 98% of its operating budget.

Despite its small-but-mighty impact, Project 2025 has two issues with FinCEN. The first is that FinCEN “conducts almost no meaningful cost-benefit analysis” about its AML-CFT activities. The second is that it does not publish annual data about the number of reports filed by private entities like banks to help FinCEN fight financial crime, the number of prosecutions, convictions, and fines obtained by FinCEN, and total compliance cost estimates on private entities.

Misleading 

The first point about no meaningful cost-benefit analyses is misleading. Many FinCEN rules are required to go through the executive branch’s rigorous cost-benefit analysis process to assess both the positive and negative economic impacts of a regulation on all affected parties. 

For instance, a July 2024 proposed rule to revise the US AML-CFT framework went through this process and emphasizes “effective, risk-based, and reasonably designed AML/CFT programs” with an “outcomes-oriented approach” to minimize costs on the nearly 300,000 financial institutions affected. Though one could argue that FinCEN’s estimates are too low or are unable to quantify all possible costs, they are based on data provided by regulated industries and their associations used in their own compliance cost estimates.

The second point about not publishing data is — annoyingly — correct: FinCEN should collect and share more data about its activities and impact so the public and policymakers alike can better assess the effectiveness of the US AML-CFT regime. 

Project 2025’s one-page anti-money laundering plan would cripple the government’s ability to address these threats.

However, it is not unreasonable to expect — given that Project 2025 itself recognizes that FinCEN is a small bureau — that they may need more staff to be able to collect and publish these data annually. 

Read full report: https://inkstickmedia.com/project-2025-will-cripple-us-anti-money-laundering-capabilities/