Today, Patrick McHenry, Chairman of the House Financial Services Committee, requested an audit by the Government Accountability Office (GAO) of the Financial Crimes Enforcement Network’s (FinCEN) Beneficial Ownership Secure System (BOSS). The BOSS registry is designed to support national security efforts by helping law enforcement target individuals exploiting the U.S. financial system for illicit activities.
Republicans have expressed concerns about FinCEN's ability to safeguard data within BOSS, following issues with managing access to information in its Bank Secrecy Act (BSA) database. This skepticism forms part of ongoing oversight by Committee Republicans to ensure that beneficial ownership reporting aligns with Congressional intent and protects sensitive information from small businesses.
In his letter, McHenry stated: “I am writing to request that the Government Accountability Office (GAO) analyze and audit the Department of the Treasury’s (Treasury) Financial Crimes Enforcement Network (FinCEN), with a focus on FinCEN’s information security and database management of the Beneficial Ownership Secure System (BOSS)."
Since January 1, 2024, FinCEN has been collecting beneficial ownership information from small businesses across the country. Businesses are required to provide personally identifiable information such as addresses and legal representatives. Concerns have arisen over how FinCEN handles sensitive BSA data, prompting Congress to ensure proper safeguards for BOSS.
The Willim M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 included strong privacy protections related to beneficial ownership information collection and disclosure. These measures include certification requirements for accessing databases and limitations on disclosing ownership details.
Currently, FinCEN maintains one of the largest repositories accessible to law enforcement through its BSA database. Recent audits by the Treasury Office of Inspector General highlighted issues in managing this data effectively. These findings contribute to Congressional concerns regarding FinCEN's capability to protect data within BOSS.
McHenry emphasized: “As FinCEN continues to collect data from small businesses throughout the country, the agency must ensure Americans’ financial privacy in both the BSA database and BOSS are appropriately protected."