Treasury Grants Banks Sweeping New Powers to Share Data in Fight Against Cartels and Fraud

WASHINGTON — The Treasury Department on Friday gave U.S. banks sweeping new authority to share customer surveillance video and cyber data with federal investigators and each other, a significant expansion of financial surveillance aimed at combating cartel financiers and sophisticated fraud rings.

In an announcement to a group of bankers in Houston on June 12, Treasury Secretary Scott Bessent detailed the new powers, which are designed to help financial institutions proactively identify and report suspicious activity. The move comes amid a broader administration push to crack down on illicit finance, particularly payroll tax fraud, which accounted for $2.5 billion in suspicious banking activity in 2025, according to the Treasury.

The new directive is built upon Section 314(b) of the Patriot Act, which facilitates information sharing between financial institutions. It follows a May 19 executive order that strengthened Bank Secrecy Act customer due diligence rules, notably mandating that immigration status be incorporated into know-your-customer checks. Last week, the Treasury’s Financial Crimes Enforcement Network, or FinCEN, also issued a specific advisory targeting the underground economy fueling illegal immigrant labor.

For small and mid-sized businesses, these expanded surveillance powers create a complex new compliance landscape. While the stated goal is to target criminal enterprises, the implementation could inadvertently sweep legitimate businesses into a dragnet of heightened scrutiny. Companies with international partners, remote workforces logging in from diverse locations, or non-resident contractors could easily trigger the very red flags the government is now telling banks to watch for. An investigation, even one that ultimately clears a company of wrongdoing, can be incredibly disruptive, freezing accounts and consuming valuable time and resources.

In our experience, regulatory shifts like this underscore the necessity of robust internal controls and proactive compliance. Waiting for a bank to flag a transaction is too late. The most effective approach is to anticipate these risks before they materialize. This is where a dedicated financial risk management strategy becomes indispensable, helping businesses identify potential vulnerabilities in their payment processes, payroll systems, and vendor relationships. We help clients navigate precisely these kinds of regulatory changes, ensuring their operations remain compliant without sacrificing efficiency. To understand how these new rules may affect your business, owners can contact C&S Finance Group LLC at csfinancegroup.com for a comprehensive review.

“Americans lose hundreds of billions of dollars to fraud each year,” Bessent said during his Houston speech. “At Treasury, we follow the money, and we know financial institutions are often the first to see suspicious activity in real time. They need the tools to act quickly and share information that can help stop fraud before it spreads.”

Under the new guidance, banks are now explicitly empowered to swap not just transactional data but also customer surveillance footage and cyber data, such as IP addresses. The Treasury highlighted several specific fraud indicators for banks to monitor. These red flags include an account that suddenly adds new pay recipients and then transfers large sums to them, user login activity from geographically distant or unusual locations, and multiple accounts being opened with similar identifying information.

The stated goal is to allow local bankers, who Bessent noted often spot emerging risks before they become national statistics, to collaborate on suspicious cases and build a more comprehensive file before bringing it to federal authorities. “When you see something and say something, you are serving the public by helping keep Americans safe,” Bessent added. “The information in your purview can help stop a cartel financier, disrupt a money laundering network, uncover labor exploitation or protect taxpayers from fraud.”

This initiative is a key component of what the administration calls a “whole-of-government” crackdown on financial crime, an effort spearheaded by Vice President JD Vance's White House Task Force to Eliminate Fraud. It aligns with a broader and more aggressive strategy targeting the financial infrastructure of drug cartels. In January 2025, President Trump issued an executive order creating a process to designate certain cartels as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs). That was followed by Treasury sanctions against foreign financial institutions, such as CIBanco and Intercam, accused of laundering millions of dollars for cartels.

While the measures are aimed at criminals, the expansion of public-private data sharing raises significant questions about customer privacy and the scope of financial surveillance. Civil liberties advocates and some industry analysts have expressed concern about how this data will be stored, secured, and used, and what recourse individuals or businesses have if they are incorrectly flagged. The new rules also have potential ripple effects for the cryptocurrency industry, as regulators may seek to integrate data from blockchain analytics firms like Chainalysis into this expanding surveillance network.

Moving forward, financial institutions will be tasked with updating their internal compliance policies, training staff on the new data-sharing protocols, and investing in technology to manage the secure exchange of sensitive information. Industry observers and businesses will be closely watching for further guidance from FinCEN on implementation and for the first enforcement actions that arise from this new collaborative framework.