Paxton opposes new federal regulations making it harder to fight financial crime

Austin, Texas — Attorney General Paxton sent a letter of comments from several states to the Political Division of the Financial Crime Enforcement Network (“FinCEN”), which is a federal organization that helps state, local, and tribal law enforcement agencies stop financial crime. The letter runs counter to FinCEN’s proposed rules, which would add new hurdles for law enforcement seeking to obtain certain information critical to prosecuting financial crimes.

The Multi-State Coalition objects to the requirement that law enforcement provide FinCEN with a new, separate, written justification and proof that they have obtained access clearance from a local court. In addition, the letter also objects to FinCEN’s verification of this authorization, which will likely block or delay the process of obtaining FinCEN records.

Under federal regulations, FinCEN already stipulates that agencies can only use its information as guidance, and any information received must be verified through another source. In addition, Congress has indicated its intention that FinCEN provide information to law enforcement without undue delay. Not only will the new rules threaten to delay justice and prosecute unscrupulous actors, they may even interfere with the administration of justice in some cases.

The letter states: “Attorneys General have repeatedly supported a common-sense beneficial ownership scheme that will allow us to ‘reduce the abuse of criminals’ and terrorists of our institutions and ensure timely and effective access to beneficial ownership information in our criminal, civil and administrative cases. . . . However, if the regulatory scheme is overly burdensome, or if the procedures developed by FinCEN cause delays during rapid investigations, the beneficial owner database will not be very useful to . . . Law enforcement agencies. . . as required by Congress.

To read the full letter with comments, click here.