Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2026
- Sponsor
- Sen. Grassley, Chuck [R-IA]
- Committees
- Judiciary Committee (primary)
- Last action
- Feb 5, 2026
Bottom line
The bill expands law enforcement's tools and increases penalties to combat various forms of illicit financial activity, aiming to close loopholes and modernize statutes.
What it actually does
This bill significantly strengthens federal laws against money laundering, terrorist financing, and counterfeiting. It expands the scope of prohibited financial transactions, increases penalties for bulk cash smuggling and illegal money services businesses, and broadens wiretap authority for related offenses. Additionally, it clarifies the Secret Service's investigative jurisdiction and mandates a comprehensive threat analysis on the use of remittances for illicit financing.
Proponents argue
Supporters argue that this bill is crucial for modernizing federal statutes to keep pace with evolving financial crimes, closing critical loopholes exploited by criminals and terrorists, and providing law enforcement agencies with the necessary tools to protect the integrity of the financial system and national security. They contend that the enhanced penalties will serve as a stronger deterrent against illicit activities.
Opponents contend
Critics may contend that certain provisions, such as the expanded definition of illegal money services businesses to include lack of awareness of licensing requirements, could lead to over-criminalization or disproportionately affect legitimate, informal financial operations. Concerns might also be raised regarding the expansion of wiretap authority and the potential for government overreach into privacy, arguing for a more precise targeting of criminal intent.
The bill is moderately complex due to its technical legal amendments, but an informed reader can understand its core provisions within a reasonable timeframe.
Sec. 2
Clarifying Value of Blank Bearer Monetary Instruments
This section amends 31 U.S.C. 5316 to clarify that a monetary instrument in bearer form with the amount left blank, if possessed to avoid reporting requirements, is considered to have a value over $10,000 if the account it was drawn on contained or was intended to contain more than $10,000 at the time of transport or negotiation. This aims to prevent evasion of currency reporting laws.
Supporters argue
Proponents argue this provision closes a loophole that criminals exploit to move large sums of money across borders without triggering reporting requirements, thereby strengthening anti-money laundering efforts.
Critics contend
Opponents might argue that this provision could inadvertently ensnare individuals who are unaware of the specific account balance intent, potentially leading to over-criminalization for actions not driven by malicious intent to evade reporting.
Tradeoffs
The provision balances the need to prevent financial crime evasion with concerns about potentially broadening criminal liability to individuals who may not have explicit knowledge of the underlying account's value or criminal intent.
Sec. 3
Enhanced Penalties for Bulk Cash Smuggling
This section amends 31 U.S.C. 5332(b) to increase the maximum prison sentence for bulk cash smuggling from 5 years to 10 years. It also introduces enhanced fines, allowing for double the standard fine amount in aggravated cases where the smuggling occurs alongside another federal law violation or as part of a pattern of unlawful activity.
Sec. 4
Expanding Scope of Money Laundering Transactions (18 U.S.C. 1957)
This section amends 18 U.S.C. 1957 to broaden how the $10,000 monetary transaction value requirement can be met in money laundering prosecutions. It allows the government to satisfy this requirement by showing that a transaction involved over $10,000 from an account with commingled illicit funds, or by aggregating a series of smaller, closely related transactions that collectively exceed $10,000.
Sec. 6
Strengthening Prohibitions on Illegal Money Services Businesses (MSBs)
This section significantly revises 18 U.S.C. 1960, broadening the definition of an 'illegal money services business' and increasing penalties. It criminalizes operating an MSB without a required state license (even if the operator is unaware of the licensing requirement or its punishability), failing to comply with federal registration, or engaging in transactions with funds known to be derived from criminal offenses. Penalties are increased to up to 5 years imprisonment, or up to 10 years and double the standard fine for transactions exceeding $1,000,000 within a 12-month period.
Sec. 8
Expanding Wiretap Authority for Financial Crimes
This section makes technical amendments to 18 U.S.C. 2516(1) to restore or expand wiretap authority for a broader range of financial crimes. Specifically, it includes bulk cash smuggling (31 U.S.C. 5332), illegal money services businesses (18 U.S.C. 1960), and additional counterfeiting offenses (18 U.S.C. 474 and 474A) as predicate offenses for which electronic surveillance can be authorized.
Sec. 9
Making International Money Laundering Apply to Tax Evasion
This section amends 18 U.S.C. 1956(a)(2)(A) to explicitly include the intent to engage in tax evasion (violations of sections 7201 or 7206 of the Internal Revenue Code of 1986) as a predicate for international money laundering offenses. This means that moving funds internationally with the intent to evade taxes can now be prosecuted under federal money laundering statutes.
Sec. 10
Expanding Prohibitions on Conduct in Aid of Counterfeiting
This section expands federal prohibitions related to counterfeiting. It amends 18 U.S.C. 474(a) and 481 to criminalize the possession of any material, tool, machinery, or equipment that can be used to make, alter, forge, or counterfeit U.S. or foreign obligations or securities, with intent to defraud. It also amends 18 U.S.C. 474A to include the possession of counterfeit deterrents or obligations from which deterrents have been removed as class B felonies.
Sec. 12
Clarification of Secret Service Authority to Investigate Money Laundering
This section amends 18 U.S.C. 3056(b)(3) to explicitly include 'money laundering, structured transactions, unlicensed money transmitting' within the investigative authority of the U.S. Secret Service. It also removes the 'federally insured' limitation, allowing the Secret Service to investigate financial crimes regardless of whether the involved institution is federally insured.
Sec. 13
Mandating Remittances and Money Laundering Threat Analysis
This section requires the Secretary of the Treasury, in consultation with the Attorney General, Secretary of Homeland Security, and other federal law enforcement agencies, to conduct a comprehensive threat and operational analysis. This analysis will examine how drug kingpins, crime syndicates, and other persons use remittances to finance terrorism, narcotics trafficking, human trafficking, money laundering, and other illicit activities, both domestically and internationally. Following the analysis, a strategy and implementation plan must be developed.
This clause specifies that a covered money services business is illegal if it operates without an appropriate state license, 'whether or not the person knows that the operation is required to be licensed or that the operation is so punishable'.
Sec. 6(a)(2)(A)
Why it matters:While legally precise, the phrasing 'whether or not the person knows' is a significant departure from traditional criminal intent requirements and could be easily overlooked by a casual reader focusing on the broader changes to MSB regulations. Its placement within a definition rather than a standalone criminal intent section makes it less prominent.
Case for: Proponents argue this clause is necessary to prevent individuals from claiming ignorance of licensing requirements as a defense, thereby closing a loophole that allows illicit operators to continue their activities by feigning lack of knowledge. It ensures that those who choose to operate MSBs are responsible for understanding and complying with the law.
Case against: Critics contend that removing the knowledge requirement for a criminal offense could lead to the unjust prosecution of individuals who genuinely operate without malicious intent and are simply unaware of complex state licensing laws. They argue it lowers the bar for criminal liability and could disproportionately affect small, informal operators.
Estimated impact: This change significantly broadens the scope of criminal liability for operating an unlicensed money services business, potentially increasing prosecutions and impacting a wider range of individuals involved in money transfers.
This section expands eligibility for danger pay allowance to personnel of U.S. Immigration and Customs Enforcement (ICE), U.S. Customs and Border Protection (CBP), and the U.S. Secret Service.
Sec. 11
Why it matters:This is a standard legislative practice for technical amendments to existing notes or non-codified provisions. It's unlikely to be intentionally buried for evasive reasons, but rather reflects its nature as an administrative adjustment.
Case for: Proponents argue that extending danger pay to these agencies recognizes the hazardous duties performed by their personnel in dangerous areas, ensuring equitable compensation comparable to other federal law enforcement agencies.
Case against: No specific opposition is typically raised against this type of provision, as it is generally seen as a matter of fair compensation for federal employees in high-risk roles. Any potential 'case against' would likely be based on overall fiscal concerns, not the merit of the allowance itself.
Estimated impact: This provision would result in a modest increase in federal personnel costs for the affected agencies, providing additional compensation to eligible employees serving in designated dangerous areas.
This section states that nothing in the Act or its amendments shall be construed to apply to the authorized law enforcement, protective, or intelligence activities of the United States or of an intelligence agency of the United States.
Sec. 14
Why it matters:This is a common and generally accepted legislative practice to ensure that new statutory language does not inadvertently impede or criminalize legitimate government operations. It is not typically considered evasive.
Case for: Proponents argue this clause is essential to prevent unintended consequences, ensuring that the bill's expanded prohibitions and penalties do not inadvertently apply to or hinder authorized and lawful activities conducted by federal law enforcement, protective, or intelligence agencies.
Case against: Critics might argue that such broad exemptions could potentially shield certain government activities from scrutiny or accountability, raising concerns about transparency and oversight, particularly if the scope of 'authorized activities' is not clearly defined or subject to sufficient checks and balances.
Estimated impact: This provision clarifies the scope of the bill's applicability, ensuring that federal agencies can continue their authorized operations without fear of violating the new provisions. It has no direct fiscal impact but affects the legal interpretation of the bill.