H.J.Res.56 - Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Financial Crimes Enforcement Network relating to Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers. (119th Congress)
Summary
H.J.Res.56 proposes congressional disapproval of a rule submitted by the Financial Crimes Enforcement Network (FinCEN). The rule pertains to Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) program and Suspicious Activity Report (SAR) filing requirements for Registered Investment Advisers and Exempt Reporting Advisers. The resolution seeks to nullify the rule, preventing it from taking effect.
Expected Effects
If the resolution passes, the FinCEN rule regarding AML/CFT and SAR filing requirements for investment advisers will not be enforced. This would maintain the status quo, where these advisers are not subject to these specific requirements. The practical effect is a continuation of the existing regulatory landscape for investment advisers concerning anti-money laundering efforts.
Potential Benefits
- Reduced compliance costs for Registered Investment Advisers and Exempt Reporting Advisers.
- Prevents potential over-regulation of the investment advisory industry.
- Avoids potential disruptions to investment strategies and client relationships.
- Maintains the current balance of regulatory oversight in the financial sector.
- Could encourage more investment and innovation in the advisory space by reducing regulatory burden.
Most Benefited Areas:
Potential Disadvantages
- Potential weakening of anti-money laundering and counter-terrorism financing efforts.
- Increased risk of illicit funds flowing through investment advisory channels.
- May create a loophole in the financial system that could be exploited by criminals.
- Could undermine international efforts to combat financial crime.
- May lead to criticism from international bodies and other nations regarding the US's commitment to fighting financial crime.
Constitutional Alignment
The resolution is an exercise of Congress's legislative power under Article I, Section 1 of the Constitution, which vests all legislative powers in Congress. Specifically, it utilizes the Congressional Review Act (chapter 8 of title 5, United States Code) to disapprove an agency rule, a power delegated by Congress itself. The constitutionality of the Congressional Review Act itself has been debated, but the act is currently codified law.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).