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House subcommittee hears testimony on rising investment scams, urges better public-private data sharing
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Summary
Members of the House Financial Services Subcommittee heard industry and advocacy witnesses describe a sharp rise in investment and elder fraud, gaps in current suspicious-reporting regimes, and calls for faster, two-way information sharing between government and private-sector firms.
The House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions convened a hearing titled “Following the Money: Tools and Techniques to Combat Fraud” to examine investment fraud trends and the effectiveness of existing anti‑fraud tools.
The hearing brought bankers, blockchain analysts, small‑business advocates and consumer groups before the panel to describe how fraud syndicates exploit technological change and reporting shortfalls. Chairman Davidson opened the session saying, “The hearing is entitled ‘Following the money, tools and techniques to combat fraud,’” and urged a whole‑of‑government approach to protect consumers.
Witnesses described a sharp rise in reported losses and gaps in the way information is shared. Darren McLaughlin, executive vice president and chief BSA/AML and sanctions officer for Flagstar Bank, testifying on behalf of the American Bankers Association, told the committee banks file millions of suspicious activity reports (SARs) and currency transaction reports (CTRs) but receive little actionable feedback from government agencies. “Although thousands of SARs are filed, they may not actually reflect criminal or other illicit acts,” McLaughlin said, and he urged clearer, risk‑based guidance and faster government feedback.
Jacqueline Burns Coven, head of cyber threat intelligence at Chainalysis, said blockchain analytics can reveal entire scam supply chains and cited large peer‑to‑peer platforms that facilitate laundering and the sale of scam infrastructure. Kathy Stokes, director of fraud prevention programs at AARP, stressed the outsized harm to older Americans and described new public‑private efforts, including the National Elder Fraud Coordination Center, to improve victim support and case coordination.
Committee members pressed witnesses on several policy choices: whether thresholds for CTRs and SARs should be adjusted for inflation, how to make SARs more useful to law enforcement, and how to regulate stablecoins and cryptocurrency intermediaries. The GAO and FTC figures cited in testimony highlighted the scale of the problem: witnesses noted both the FTC’s published loss estimates and GAO findings that law enforcement accesses only a small fraction of available CTR records.
No formal votes or policy decisions were taken at the hearing. Members from both parties emphasized the need for better federal training for state and local law enforcement, improved two‑way information sharing with banks and analytics firms, and targeted measures to protect older adults and small businesses.
Looking ahead, witnesses said Congress can help by clarifying data‑sharing authorities, adjusting antiquated reporting thresholds, and funding training and technical assistance for state and local investigators. The hearing record will remain open for five legislative days for submission of additional materials, and witnesses were asked to respond to follow‑up questions by May 6.
