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Banking Dive reports that Democratic lawmakers walked out of a joint hearing of the House Financial Services and Agriculture committees on Tuesday, ending the hearing under a House rule that joint committee hearings require unanimous consent.

Ranking member Maxine Waters raised concerns about the “unprecedented” conflict of interest presented by President Trump and his family, citing reports that insiders made nearly $100 million on Melania Trump’s meme coin. “Through his crypto business, Trump has turned the office of the presidency into a personal money-making machine,” she said. “He is flouting our country’s national security and anti-corruption laws, allowing the adversaries like China and Russia to curry favor, either blatantly or anonymously, through transfers of money to him and his inner circle.”

The Banking Dive article reports that, in the Senate, Democrats are calling for changes to pending crypto legislation as concerns mount over the Trump family’s ties to the space and the president’s ability to benefit from crypto trading. The resistance gained momentum last week when Senate Minority Leader Chuck Schumer, D-NY, asked his colleagues not to vote for the GENIUS Act, which the Senate Banking Committee advanced last month, The New York Times reported. The GENIUS Act is a consumer protection bill that aims to establish federal safeguards to protect stablecoin holders and enhance consumer confidence in the payment stablecoin market.

Anna Kelly, the White House’s deputy press secretary, reportedly asserted that the president has no conflict of interest since his assets are in a trust managed by his children.

The Treasury Department has reported that OFAC has sanctioned the Karen National Army (KNA), a militia group in Burma, as a transnational criminal organization, along with the group’s leader Saw Chit Thu, and his two sons, Saw Htoo Eh Moo and Saw Chit Chit, for their role in facilitating cyber scams that harm U.S. citizens, human trafficking, and cross-border smuggling.

For a link to identification information on the KNA and its three leaders, see yesterday’s BankersOnline OFAC Update.

OFAC has posted a Notice of Recent Actions adding two State Department designated entities — Gran Grif and Viv Ansanm — to its SDN List as Foreign Terrorist Organizations and Specially Designated Global Terrorists.

The identity information for the two groups is detailed in OFAC's Notice.

FinCEN reports it has issued a finding and notice of proposed rulemaking (NPRM) under Section 311 of the USA PATRIOT Act that identifies Cambodia-based Huione Group as a financial institution of primary money laundering concern and proposes to sever its access to the U.S. financial system.

FinCEN said Huione Group serves as a critical node for laundering proceeds of cyber heists carried out by the Democratic People’s Republic of Korea (DPRK), and for transnational criminal organizations (TCOs) in Southeast Asia perpetrating convertible virtual currency (CVC) investment scams, commonly known as “pig butchering” scams, as well as other types of CVC-related scams. Given the money laundering risk posed by Huione Group, FinCEN is proposing to prohibit U.S. financial institutions from opening or maintaining correspondent or payable-through accounts for or on behalf of Huione Group.

Comments on the proposed rule will be accepted for 30 days following its publication in the Federal Register.

PUBLICATION AND COMMENT PERIOD UPDATE: Published at 90 FR 18934 on May 5, 2025, with a comment period ending June 4, 2025.

The Treasury Department has reported that OFAC has sanctioned three Mexican nationals and two Mexico-based entities involved in a drug trafficking and fuel theft network linked to the Cartel Jalisco Nueva Generacion (CJNG). This network generates hundreds of millions of dollars annually, benefitting CJNG, through a slew of criminal activities, including fentanyl trafficking, fuel theft, and smuggling stolen crude oil from Mexico across the southwest border. Concurrently, Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an Alert that provides financial typologies and red flags indicative of crude oil smuggling schemes on the U.S. southwest border associated with CJNG and other Mexico-based transnational criminal organizations.

FinCEN’s Alert is one of several other recent FinCEN advisory and analytic products on revenue streams and illicit activity associated with Mexico-based transnational criminal organizations, to include the procurement of fentanyl precursor chemicals and fentanyl-related threat patterns and trends; timeshare fraud; human smuggling along the southwest border; and bulk cash smuggling.

The California Department of Financial Protection and Innovation (DFPI) has issued a Consent Order against Hatch Bank, a state-chartered, FDIC-insured, Banking as a Service (BaaS) sponsor bank, requiring its Board of Directors to strengthen its supervision and direction of bank management, and its monitoring of the bank's AML/CFT program. The order results from a March 2024 Report of Examination by the DFPI and FDIC that identified unsafe or unsound banking practices, reportedly connected to the bank's third-party-fintech business model.

The case is of importance as it may be one of the first times that a state has pursued a state-chartered BaaS bank on its own, instead of jointly with a federal agency involved. In this case, the order was issued only by the California DFPI. To date, no parallel enforcement action has been issued by the FDIC. In addition, the timing for remediation in the order is very short compared to what we have traditionally seen.

The bank is ordered to revise its written AML/CFT risk assessment to accurately reflect the bank's fintech partnerships, customer types, volumes, and geographies within 60 days. Within 90 days, it must also improve its policies for internal controls, transaction alert review and SAR processes, customer due diligence, monitoring model evaluations, and staffing adequacy.

The bank must also make periodic reviews of every vendor or fintech partner that provides BSA functions such as customer due diligence, monitoring, case management, etc.

Yesterday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated six entities and six individuals based in Iran and the People’s Republic of China for their role in a network procuring ballistic missile propellant ingredients on behalf of Iran’s Islamic Revolutionary Guard Corps. This network has facilitated the procurement of sodium perchlorate and dioctyl sebacate from the PRC to Iran. Sodium perchlorate is used to produce ammonium perchlorate, which is controlled by the Missile Technology Control Regime, a multilateral political understanding among states that seek to limit the proliferation of missiles and missile technology. Both ammonium perchlorate and dioctyl sebacate are chemicals usable in solid propellant rocket motors, which are commonly used for ballistic missiles.

Yesterday’s action was taken under the authority of Executive Order 13382, which targets proliferators of weapons of mass destruction and their means of delivery. The action was also taken in furtherance of National Security Presidential Memorandum 2, which directs the U.S. government to curtail Iran’s ballistic missile program, including working with key allies on the potential snapback of UN sanctions, and to disrupt the Islamic Revolutionary Guard Corps.

For a link to identification information on the designated individuals and entities, see yesterday’s BankersOnline OFAC Update.

The Treasury Department has reported that OFAC has targeted three vessels and their owners for providing support to Ansarallah, commonly known as the Houthis, which is part of the Iranian regime’s network of terrorist proxies and partners.

For a link to identification information on the designated parties, see yesterday’s BankersOnline OFAC Update.

South Carolina station WIS10 news has reported that three men have been indicted after an investigation into a money laundering operation. The three men, Nasir Ullah, Naim Ullah, who are brothers residing in Sumter, and Puquan Huang, who resides in Georgia are accused of laundering over $30 million of proceeds related to the distribution of illegal drugs in the country, the indictment stated.

Acting U.S. Attorney Brook B. Andrews said the men offered their services to drug dealers across the southeast, from whom they would purchase a bunch of cash. The men would later allegedly use those proceeds to purchase electronics in China and the Middle East and use those transactions to conceal the illicit source of the money they received. “They offer their services to drug dealers across the Southeast from whom they would purchase large amounts of cash, they would then use those drug proceeds to purchase and ship electronics to destinations in China and the Middle East and use those transactions to conceal the illegal source of their funds,” said Andrews.

Bank BSA officers would describe this case as a textbook example of trade-based money laundering.

The Social Security Administration (SSA) on Friday announced it is taking steps to provide a significant enhancement for "my Social Security" account holders, by introducing secure digital access to their Social Security number (SSN). This innovative feature is designed to provide the American public with a modernized, secure, and accessible alternative to the traditional physical SSN card.

The digital SSN feature will allow account holders to conveniently display their SSN, when needed, for reasons other than handling Social Security matters. This enhancement will provide individuals who have forgotten their SSN or misplaced their SSN cards a simple solution allowing them to securely view their SSN online through the my Social Security portal. This will reduce their need for an in-person visit and/or having to wait to receive their SSN card through the mail. They will be able to access it via my Social Security on their mobile devices. By providing a secure digital option, SSA aims to reduce the risk of lost or stolen cards and enhance the overall user experience.

[Editor's Note: There does not appear to be any mention of this enhancement yet on the my Social Security portal.]