FinCEN Data Deletion raises Concerns Over Clarity Efforts
Recent actions by the Financial crimes Enforcement Network (FinCEN) to perhaps delete data collected on U.S.companies are sparking criticism from transparency advocates, who argue the move undermines efforts to combat financial crime. The planned deletion concerns records gathered under the Corporate Transparency Act (CTA), a landmark reform initially implemented during the final days of President Donald Trump’s first term via the 2021 National Defense Authorization Act, despite a prior veto by the President which was overridden by Congress.
The Treasury Department, in a March press release, justified the suspension of enforcing the CTA against domestic companies as a measure “in the interest of supporting hard-working American taxpayers and small businesses.” Treasury Secretary Scott Bessent characterized the decision as “a victory for common sense.”
though, advocates contend that U.S.companies are frequently exploited for illicit purposes. gary, from the FACT Coalition, pointed to FinCEN’s August 28th financial trends analysis, which detailed how Chinese money laundering networks utilized domestic shell companies to purchase real estate. This highlights a contradiction, gary stated, between the governance’s stated priorities and the need for robust law enforcement tools to address issues like drug and human trafficking.
The potential destruction of already collected data is viewed as both potentially illegal and counterproductive. According to Erik Kalman,deleting 10 to 12 million records without assessing their potential connection to criminal activity “undermines your stated interest in shutting down cartels and transnational criminal organizations.”
Despite these recent policy shifts, Kalman expressed hope that they represent a temporary setback. He emphasized the importance of transparency initiatives, citing the impact of investigations like the FinCEN Files in raising public awareness.These investigations revealed the ease with which money can be moved globally and underscored the need to strengthen financial intelligence units.
The FinCEN Files inquiry also spurred increased funding and bipartisan congressional support for fincen itself, which was previously considerably underfunded compared to its counterparts in other countries, like Australia. The agency had been “massively underfunded and expected to do a job that, given its resources, was simply overmatched,” Kalman explained, noting the unusual level of congressional consensus on the issue despite broader political polarization.
While the weakening of the CTA and other transparency regulations sends a concerning signal, investigative journalist Leopold maintains that the impact of the FinCEN Files investigation remains significant. “Our work was powerful,” he said, emphasizing the accountability it fostered and the exhibition of the harm caused by financial crimes.
(Correction Sept. 19, 2025: This story was updated to reflect that the Corporate Transparency Act was passed into law under the 2021 National Defense Authorization Act. President Donald Trump vetoed the bill on Dec.23, 2020, but Congress voted to override the veto.)
