Anti-Money Laundering Bill Passes Committee With ALTA Changes

May 14, 2019

On May 9, the Financial Services Committee voted 50-0 to advance HR 2514, the "Coordinating Oversight, Upgrading and Innovating Technology, and Examiner Reform Act of 2019." The bipartisan legislation updates the federal anti-money laundering laws to close loopholes, increase penalties and provide new tools and reduce the reporting burden for financial institutions.

The bill was the subject of a hearing in March. At that time, a discussion draft included a provision to expand the FinCEN Geographic Targeting Orders to cover commercial real estate transactions on the same terms as residential transactions (e.g. cash purchases over $300,000). Also included was a provision to affirmatively cover transactions made using a like kind exchange.

Following the release of the discussion draft, ALTA staff met with the staff of the House Financial Services Committee to provide the industry experience and views on the GTO. In that meeting, ALTA  expressed concerns that just adding commercial real estate into the existing GTOs would be ineffective since it would leave significant loopholes and increase the burden on the industry.

Following the meeting, ALTA staff provided suggested edits to the language to require FinCEN to issue a unique GTO on commercial real estate. While committee staff expressed support for the changes, the draft of the bill introduced for last week's mark-up did not include them.

Thankfully, ALTA members were able to get a last-minute meeting with bill sponsor Rep. Emanuel Cleaver (D-MO). During this meeting, ALTA Board Governor David Townsend, Cheryl Cowherd and Missouri Land Title Association First Vice President Mark Foglesong pressed the need for these changes and learned that they would be included in an amendment.

During the ALTA Advocacy Summit, attendees asked for support of HR 2513, which would require LLCs to file reports with FinCEN on their beneficial ownership at the time the business structure is created. These reports would be private, but accessible to law enforcement and title companies (with customer permission). ALTA supports this legislation to ease the burden on title companies reporting cash transactions under the FinCEN Geographic Targeting Orders.

This bill was slated to be voted on by the House Financial Services Committee on the day ALTA Advocacy Summit attendees were on Capitol Hill. Prior to this, there were reports that it would pass the committee with all the Democrats and handful of Republicans voting for the bill. However, after ALTA members discussed the bill on May 8, the vote was postponed allowing time to negotiate some changes to garner more Republican support. If the bill passes with overwhelming bipartisan support, it will be due to the outreach of ALTA members on Capitol Hill Day.

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