On July 21, 2026, Financial Crimes Enforcement Network (FinCEN) Director Andrea Gacki appeared before the House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions to deliver written testimony outlining the agency’s current priorities. The hearing provided a comprehensive window into FinCEN’s evolving posture on fraud prevention, Bank Secrecy Act (BSA) modernization, and the regulatory framework governing digital assets. For banks, broker-dealers, and other financial institutions subject to BSA obligations, Gacki’s testimony deserves careful attention. The message is unmistakable: FinCEN is pursuing a recalibrated approach to anti-money laundering and countering the financing of terrorism (AML/CFT) compliance — one that prizes effectiveness over process, reduces low-value reporting burdens, and simultaneously expands the agency’s supervisory footprint in new directions.
Link to Fraud Prevention: Rapid Response, Huione Severance, and Interagency Coordination Fraud Prevention: Rapid Response, Huione Severance, and Interagency Coordination
Gacki placed fraud squarely at the center of FinCEN’s operational priorities, citing Treasury’s March 2026 National Money Laundering Risk Assessment, identifying fraud as one of the largest sources of illicit proceeds in the United States. The numbers are striking. FinCEN’s Rapid Response Program (RRP) — a partnership with U.S. law enforcement and foreign counterparts operational since 2015 — has facilitated interdiction of nearly $2 billion in stolen proceeds for 5,790 U.S. individuals and businesses victimized by cyber-enabled fraud schemes.
Equally significant is FinCEN’s aggressive use of special measures authority against the Huione Group. In October 2025, FinCEN severed Huione — responsible for laundering at least $4 billion in illicit proceeds — from the U.S. financial system. When successor entities attempted to circumvent that designation, FinCEN took follow-on action in June 2026 to close the gap. This willingness to pursue successor entities signals that FinCEN will not tolerate shell-game restructurings designed to evade sanctions-style designations.
In support of the White House Task Force to Eliminate Fraud, FinCEN has identified fraud typologies exploited by organized crime and transnational criminal organizations targeting government healthcare and benefit programs, issued guidance clarifying how institutions can share fraud information in real time, and trained government stakeholders on the utilization of BSA data. Financial institutions should note the emphasis on real-time information sharing — a clear signal that FinCEN expects proactive, collaborative engagement from the private sector in fraud detection.
Link to BSA/AML Modernization: The Program Rule and SAR FAQs Redefine the Compliance Landscape BSA/AML Modernization: The Program Rule and SAR FAQs Redefine the Compliance Landscape
The centerpiece of Gacki’s testimony is FinCEN’s April 2026 proposed rule to fundamentally reform AML/CFT programs under the BSA — the so-called “Program Rule.” This notice of proposed rulemaking (NPRM), published in the Federal Register on April 10, 2026, fully supersedes FinCEN’s prior July 2024 proposal and implements key provisions of the AML Act of 2020.
The shift is fundamental. Rather than evaluating compliance through a process-based, technical-compliance lens, the Program Rule proposes an effectiveness-based standard built on a two-pronged framework: (1) whether a financial institution has established an AML/CFT program and (2) how it implements and maintains that program operationally. The intent is to prevent examiners from conflating program design criticism with operational shortcomings — a distinction that should provide meaningful relief to institutions facing subjective supervisory judgments.
Notably, the rule proposes a new supervisory role for FinCEN itself, aimed at promoting risk-based, reasonably designed programs and greater consistency across regulatory agencies. The OCC, FDIC, and NCUA have issued a companion joint NPRM to align their BSA/AML program rules with FinCEN’s framework — though the Federal Reserve’s absence from that joint action is worth monitoring.
FinCEN’s October 2025 Suspicious Activity Report (SAR) FAQs complement this effort by clarifying SAR obligations and reducing certain filing burdens, enabling institutions to focus their resources on the most critical law enforcement reporting. Taken together, these initiatives represent the most significant recalibration of the BSA/AML framework in a generation.
Link to Digital Assets Under the GENIUS Act and the New Whistleblower Program Digital Assets Under the GENIUS Act and the New Whistleblower Program
FinCEN has issued two proposed rules implementing AML and customer identification program (CIP) requirements for permitted payment stablecoin issuers (PPSIs) as mandated by the GENIUS Act. These obligations are designed to be “fit for purpose” — calibrated to the specific risks of stablecoin issuance while assisting law enforcement and minimizing unnecessary burden. FinCEN’s FY 2027 budget request specifically identifies resources needed for full GENIUS Act implementation, signaling that stablecoin supervision will be a sustained priority rather than a one-time rulemaking exercise.
Separately, FinCEN’s whistleblower program is now operational. In February 2026, Treasury Secretary Scott Bessent launched a dedicated webpage for confidential tips. An April 2026 proposed rule established procedures, eligibility criteria for awards, and confidentiality requirements. FinCEN is actively triaging incoming tips, and once the final rule is issued, the agency will begin processing and paying awards. Financial institutions should treat this development with the seriousness it warrants: A fully operational whistleblower program with monetary incentives will inevitably generate increased scrutiny from internal sources, making robust internal compliance programs and reporting channels more critical than ever.
Link to Emerging Compliance Risks and Regulatory Priorities to Monitor Emerging Compliance Risks and Regulatory Priorities to Monitor
Several threads in Gacki’s testimony and the broader hearing context warrant heightened attention. Chairman Warren Davidson recently characterized the BSA as “a bloated surveillance machine,” reflecting Congressional pressure to constrain FinCEN’s regulatory reach, yet BSA/AML enforcement is likely to continue, if not escalate, through 2026 despite burden-reduction rhetoric. This tension between deregulatory messaging and sustained enforcement creates a uniquely challenging compliance environment. Institutions that mistake burden-reduction signals for enforcement relief may find themselves exposed.
Additionally, FinCEN continues to pursue illicit Russian finance (sanctions and export control evasion), fentanyl-related money laundering through Chinese networks, and cartel-linked Mexican financial institutions through special measures actions. These national security priorities will drive continued expectations for robust suspicious activity monitoring, particularly for institutions with cross-border exposure.
Link to The Bottom Line: Five Steps for Financial Institutions The Bottom Line: Five Steps for Financial Institutions
Gacki’s testimony confirms that FinCEN is simultaneously lightening the compliance framework’s procedural demands and raising the bar for operational effectiveness. The institutions that thrive in this environment will be those that translate the new effectiveness standard into concrete programmatic improvements. Here is what you should do now:
- Evaluate your AML/CFT program against the Program Rule’s two-pronged framework. Begin mapping existing policies and procedures to the “establishment” and “implementation” prongs now — before the final rule is issued — to identify gaps in documentation, risk assessment, and resource allocation.
- Reassess SAR filing practices considering the October 2025 FAQs. Ensure your institution is focusing SAR resources on the highest-value reporting rather than maintaining legacy practices that generate volume without meaningful law enforcement utility.
- Prepare for the whistleblower program’s full activation. Strengthen internal reporting channels, ensure anti-retaliation protections are robust, and review compliance training to encourage internal escalation before submitting an external tip.
- Monitor beneficial ownership obligations carefully. The Corporate Transparency Act’s scope has narrowed for now, but the statutory framework remains in place. Do not dismantle customer due diligence processes prematurely — the pendulum may swing back.
- Engage with the rulemaking process. The Program Rule’s comment period has closed, but the 12-month implementation period after a final rule provides a defined runway. Institutions that engage proactively — through industry comment, trade association participation, and early operational planning — will be best positioned to demonstrate the “effectiveness” the new standard demands.