Financial Institution Security Act

Mr. Speaker, I thank Representative Tipton. I rise today to speak on behalf of the bipartisan Empowering Financial Institutions to Fight Human Trafficking Act.

The International Labor Organization estimates that, globally, over 40 million people were victims of human trafficking in 2016. It is obvious that in order to deter the criminals who enslave and sell human beings, we need to hit them where it hurts: their bank accounts.

Right now, financial institutions are attempting to identify human trafficking activity, but many suspicious activity reports are based on false flags. Financial institutions are largely left alone to determine what information is valid. Without good, specific, verifiable, targeted information, financial institutions may wrongly identify people, overrespond, and overtarget, or fail to recognize criminal activity.

Finding the traffickers who take advantage of our financial system can be a daunting task. We need to figure out how to do it better. This legislation is an opportunity to help financial institutions wade through the muck and locate bad actors.

This summer, the Financial Action Task Force released a report that identified significant challenges in detecting, investigating, and prosecuting laundering related to human trafficking, including, ``incomplete domestic information sharing among stakeholders.''

That is why I was proud to introduce the Empowering Financial Institutions to Fight Human Trafficking Act with my colleague and fellow advocate, Congresswoman Maloney, along with Congresswoman Love, Congresswoman Tenney, and Congresswoman Sinema.

Over the past year, I have worked in the Financial Services Committee to explore how human traffickers exploit U.S. financial markets. In January, the Subcommittee on Oversight and Investigations, which I chaired, held a hearing to examine how financial institutions monitor accounts and identify trafficking. We know that if traffickers can't finance their operations, they can't profit from their crimes.

This bill creates a pathway for registered nonprofits to safely provide valuable information on trafficking crimes to financial institutions, without the threat of defamation suits that could end their organizations.

Throughout the process of crafting this bill, I have found that banks are increasingly seeking actionable information from the nonprofits that specialize in gathering it. It is incredibly challenging for financial institutions to pinpoint trafficking crimes that are happening far away in mines, in fields, in factories, hotels, or boats, obscured from analysts who are trying to practice good customer due diligence.

Let me be clear, Mr. Speaker. This legislation instructs the Secretary of the Treasury to develop a process that will make civil society experts more available to financial institutions and establish transparent standards for information sharing.

The bill guides the Secretary to register only NGOs that have the rigor and expertise to substantiate their claims and correct any inaccurate information.

I am excited that we are finding ways to connect those who have good intelligence with those who are seeking it without exposing nonprofits to devastating lawsuits they can ill afford.

This system will target verified traffickers and reduce reliance on nonspecific information that can target innocent people.

I look forward to casting my vote to prevent human traffickers from using the U.S. financial system to exploit victims around the world. Together, this Congress can disrupt the networks that make modern-day slavery profitable and free vulnerable people around the world who have been enslaved.

Mr. Speaker, I yield myself the balance of my time.

In closing, I would like to reiterate, despite what some have said about this piece of legislation, that this legislation requires NGOs to register with Treasury in order to create a process that protects only rigorous, credible organizations that can offer verifiable information to financial institutions. This process will safeguard innocent people and entities that may currently be targeted by the broad, general patterns that are reported to financial institutions.

At present, there is no way for financial institutions to wade through all the tips and information they receive and use it to prevent traffickers from using our financial systems. We need a meaningful system that can actually identify traffickers and allow banks to verify those IDs. That is what this bill does.

I would also like to make clear that this piece of legislation does not amend or touch the PATRIOT Act and does not create any new structures for banks to share information with each other.

This legislation is supported by organizations, including, Mr. Speaker, Western Union, MoneyGram, and Liberty Asia. It also happens to be one of the key recommendations from Polaris' groundbreaking new report: ``A Road Map for Systems and Industries to Prevent and Disrupt Human Trafficking.''

Mr. Speaker, I include the report in the Record.

2. Pass legislation to provide safe harbor to facilitate

information sharing between civil society and financial

institutions

NGOs that work with survivors and vulnerable populations

often have access to critical information about bad actors.

Regulations focused on the sharing of information between

financial institutions or between financial institutions and

government agencies, such as Section 314(a) and (b) of the

USA Patriot Act or the regulations for filing Suspicious

Activity Reports (SARs), provide appropriate protections for

such sharing. No such protections are currently available to

NGOs for sharing critical information that may assist in the

detection, deterrence or prevention of trafficking.

While NGO's are currently able to report tips directly to

law enforcement, the information may be too limited to

realistically spur law enforcement action--often because the

information is obtained from confidential sources who cannot

be contacted by law enforcement. However, if these leads were

provided to financial institutions, the financial

institutions may be able to assist in providing additional,

relevant, and actionable information to law enforcement.

Addressing the liability concerns of NGO's which wish to

participate in information exchanges is an important first

step in actualizing this process. Legislation is required to

provide these protections to NGOs. Once this barrier is

removed, law enforcement, NGO's, and financial institutions

can work together to develop agreed upon processes and

protocols that govern appropriate information sharing.

Mr. Speaker, Dow Jones has said that the information provided to it from NGOs like Liberty Asia and others is relevant and actionable in its anti-money laundering work.

This bill enables FinCEN and financial institutions to gather hard intelligence that can be verified or disproven, rather than rely on, as I said, general, useless, or even faulty tips from nonprofits, private citizens, and other sources without technical experience that could lead to false identifications and persecution of innocent actors.

It is the lack of verifiable specificity and the lack of regulated accreditation that allows for the targeting of innocent groups.

This bill creates a process, run by Treasury, where responsible nonprofits that professionally analyze information and create intelligence products that help financial institutions better identify these crimes can share information without worrying about whether sharing this information is going to end their organizations.

I could go on and on, but Members of this body should never forget what we are doing today is protecting the 40 million victims of trafficking around the world.

Human trafficking is a horrific crime that represents $150 billion per year, and it is far too often funded by the U.S. financial system. This is preventable, and today, we are taking steps towards ending America's financing of exploitation of our most vulnerable.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, H.R. 6729 is a well-intentioned bill aimed at countering human trafficking. My first concern with the bill, however, is the lack of a deliberative process surrounding the measure, which could lead to a number of serious unintended consequences as currently drafted.

The bill will give a sweeping safe harbor to nonprofits that share information with financial institutions regarding the involuntary trafficking of children, women, and men that will nullify all State and local defamation, libel, and privacy laws.

This means eligible nonprofits could share personally identifiable information about any person the nonprofit merely suspects of human trafficking with any financial institution, even if their information is false or misleading. Such sharing of information could, in turn, lead financial institutions to close an individual's account and deny them access to the financial system, even if the individual has not been arrested or indicted for a crime.

Importantly, this bill also explicitly states that the Treasury Department may not impose a requirement that the nonprofits share the information in good faith. Therefore, this bill doesn't protect against malicious or negligent reporting. In fact, the Due Process Institute has stated: `` . . . Surely not every suspicion or accusation that would come through a nonprofit will be accurate or truthful. Some suspicions or accusations might even be motivated by personal, political, ethnic, racial, cultural, or religious animus.''

Finally, Mr. Speaker, I include in the Record two letters of opposition to the bill from two coalitions of civil liberty and privacy advocates, including the American Civil Liberties Union, the Due Process Institute, Freedom Works, the National Association of Criminal Defense Lawyers, the Project On Government Oversight, Defending Rights and Dissent, and New America's Open Technology Institute, among others.

September 25, 2018.

Dear Representatives: We urge you to vote against H.R. 6729

when the measure is considered later this week. The

legislation would allow the Treasury Department to expand the

surveillance and sharing of Americans' financial records

beyond what is provided for by the USA PATRIOT Act. The

government has previously sought and Congress has rightly

voted to reject such an expansion. Similar legislation in the

114th Congress, H.R. 5606, drew opposition from 177 members

and failed on a suspension vote.

The legislation has broad applicability and significantly

harmful effects that go far beyond its stated purpose of

allowing financial institutions to combat human trafficking.

H.R. 6729 contains an overly broad provision that prohibits

Treasury from requiring nonprofit organizations to show that

they are sharing information in good faith and preempts

liability for organizations under privacy laws. While the

measure is described as allowing nonprofits to report

suspicions of human trafficking or money laundering to

financial institutions, it risks our privacy and raises

concerns about the misuse of information.

In addition, H.R. 6729 allows a wide range of institutions

to communicate with each other about ``suspicious''

activities regardless of the basis for the suspicion and

despite other applicable laws and consumer agreements. The

concerns need not be rooted in reality. Moreover, the safe

harbor provision does not merely encompass traditional

financial institutions like banks and financial services

providers, but extends more broadly. This legislation also

fails to establish any legal recourse for negligent or

malicious acts.

H.R. 6729 would create the risk of financial institutions

closing accounts of people they deem too risky to do business

with on the basis of meritless or otherwise unsupported

claims from nonprofit organizations. Every financial

institution already has a legal obligation to file a

``Suspicious Activity Report'' with the government whenever

it ``knows, suspects, or has reason to suspect that an

individual, entity, or organization is involved in or may be

involved in terrorist activity or money laundering.'' It is

an unfortunate fact that suspicions and accusations can be

based on or motivated by personal, political, ethnic, racial,

cultural, or religious animus. It is unacceptable to expand

the scope of entities that can submit this information in a

process that is broadly immunized from legal recourse.

This legislation goes far beyond the goal of combating

human trafficking and significantly expands governmental

surveillance, the impact of which falls most heavily and

relentlessly on those who are the least able to defend

themselves. Now is not the time to rush this legislation,

introduced a mere two weeks ago, through a legislative

procedure intended for uncontroversial bills.

Sincerely yours,

American Civil Liberties Union, American-Arab Anti-

Discrimination Committee, Color Of Change, Defending Rights &

Dissent, Demand Progress Action, Free Press Action, Freedom

of the Press Foundation, Government Information Watch, New

America's Open Technology Institute, Project On Government

Oversight, X-Lab.

Mr. Speaker, I remain committed to fighting against human trafficking, but this bill may result in serious unintended consequences for innocent people, including losing access to their money and to the financial system based on the mere accusation from a nonprofit. For this reason, I oppose this bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield as much time as she may consume to the gentlewoman from New York (Mrs. Carolyn B. Maloney).

Mr. Speaker, I yield such time as she may consume to the gentlewoman from Arizona (Ms. Sinema).

Mr. Speaker, I have no further speakers, and I yield back the balance of my time.

Mr. Speaker, every day, I hear from Arizonans who are sick and tired of the dysfunction in Washington. They know that the partisan fights and name-calling keeps Congress from delivering the results that Arizona families expect from their leaders.

Arizonans deserve leaders who come together and find solutions on issues that matter, like keeping our families safe, protecting our Nation, and honoring our commitment to veterans.

We can still get things done for Arizona families if we would stop the political games and work across the aisle. We have an opportunity to prove that today by passing three bipartisan bills that will make a difference for Arizonans.

I am lucky to have worked closely with my Republican colleagues on these three commonsense solutions that improve our ability to fight human trafficking, protect our country from weapons of mass destruction, and support Arizona veterans.

We have a moral obligation to fight human trafficking, stand up for victims, and bring traffickers to justice. That is why I cosponsored the Empowering Financial Institutions to Fight Human Trafficking Act with Congresswoman Wagner, Congresswoman Maloney, Congresswoman Love, and Congresswoman Tenney.

This legislation helps nonprofits share valuable intelligence and collaborate with institutions in real time. Nonprofits are frequently on the front lines of this fight, combating trafficking and supporting victims. They see what is happening on the ground,

and our bill ensures we can freeze money and stop those traffickers in their tracks. This is good policy that will protect families, and I urge my colleagues to vote ``yes.''

Keeping Arizonans safe is my top priority. We are also set to pass a bipartisan bill I introduced with Congressman Tipton to protect America from terrorists and rogue states like North Korea and Iran.

This week, the President has addressed the United Nations to call for action to stop weapons proliferation and other threats in Iran. In Congress, we are taking bipartisan action to combat these same threats.

Our bill, the Improving Strategies to Counter Weapons Proliferation Act, makes it harder for America's enemies to get their hands on the world's most deadly weapons by helping choke off the financing of terrorist activity. This bill makes our country safer and our communities safer, and I urge my colleagues to vote ``yes.''

Finally, we must always ensure that our support for veterans is worthy of their sacrifice, and that is why I worked across the aisle with Congressman Zeldin and Congresswoman Tenney to introduce and pass the Protect Affordable Mortgages for Veterans Act. This bill fixes the law and protects veterans from higher costs to refinance their homes. Our actions help more Arizona veterans achieve the American Dream of homeownership, and, again, I would urge my colleagues to support this bipartisan fix that helps America's heroes.

These three bills show that we can get things done and deliver for everyday Arizonans if we just work together and find common ground, and I will continue to work across the aisle to keep Arizona families safe and ensure we honor our commitment to our veterans and military families.

In particular, I want to thank Congresswoman Wagner, Congressman Tipton, and Congresswoman Tenney for working together on these important bills, and I urge my colleagues to support these bipartisan bills.

Mr. Speaker, I thank my good friend and colleague from New York, who is the ranking member on Small Business, as an outstanding leader on Puerto Rico, on business, on women, and in so many areas. I rise today and join my colleague on the other side of the aisle, Ann Wagner, in strong support of H.R. 6729, the Empowering Financial Institutions to Fight Human Trafficking Act.

This bill cracks down on human traffickers and human trafficking in general, which is one of the worst crimes imaginable. This bill will save lives by cracking down on human trafficking.

Human trafficking is the fastest growing criminal enterprise in the world. It already generates over $150 billion in profits every year. There are only two crimes that generate more revenue, and those are selling drugs and selling guns. But in human trafficking, you can sell the body over and over again, usually until they die.

The $150 billion is an astonishing amount of money, and that is why it is so important to make sure that financial institutions have access to high-quality, up-to-date information on human traffickers and the companies and individuals involved in this terrible trade.

This bill would ensure that financial institutions get the information they need about trafficking so that they can take appropriate action to protect both themselves and the sufferers of human trafficking.

The bill would give qualified nonprofits a legal safe harbor when they share information about human trafficking with financial institutions.

And it is not-for-profits that have been the most successful in combating and stopping this horrible crime.

The nonprofits would have to be registered with Treasury in order to qualify for the safe harbor and would have to abide by any safeguards Treasury establishes to ensure that the information they are providing is credible and accurate.

So the bill would not open the door to blatantly false or malicious accusations being made. To the contrary, it would help nonprofits who are actively engaged in stopping human trafficking around the world.

Without this safe harbor, these nonprofits would be afraid to share the information they have about traffickers with banks out of fear of being sued.

This bill is supported by law enforcement. This bill will allow a cracking down on this terrible, terrible crime that costs the lives of thousands of our young people. It is important.

This bill will save lives. That is why I support it, and I urge my colleagues to support this bill.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 6729) to allow nonprofit organizations to register with the Secretary of the Treasury and share information on activities that may involve human trafficking or money laundering with financial institutions and regulatory authorities, under a safe harbor that offers protections from liability, in order to better identify and report potential human trafficking or money laundering activities.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and include extraneous materials on this bill.

Mr. Speaker, I yield as much time as she may consume to the gentlewoman from Missouri (Mrs. Wagner).

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield the balance of my time to the gentlewoman from Missouri (Mrs. Wagner), and I ask unanimous consent that she be allowed to control that time.