Lawmakers say traffickers found a loophole in U.S. law, now this bill aims to shut it down

Bipartisan senators introduced new legislation this week aimed at closing financial loopholes used by drug traffickers and terrorist organizations. As reported by Fox News, the bill is being led by Republican Sen. Chuck Grassley and Democrat Sen. Amy Klobuchar and targets outdated statutes that lawmakers say no longer reflect how criminal networks move money.

The proposal, formally titled the Combating Money Laundering, Terrorist Finance and Counterfeiting Act, arrives as officials within the Trump administration warn that international cartels and terror groups are increasingly relying on complex financial channels that cross U.S. borders. President Trump has repeatedly described drug trafficking as a national security threat, with DEA Administrator Terry Cole publicly backing efforts to cut off funding sources tied to criminal organizations.

Lawmakers argue that current laws have not kept pace with modern financial crimes. The bill seeks to update enforcement tools to better address sophisticated money laundering tactics that operate outside traditional banking systems.

Lawmakers say criminal networks have outpaced current statutes

A central focus of the legislation is expanding money laundering laws to cover informal value transfer systems, which allow criminals to move large sums of money without a clear paper trail, a debate that echoes recent critiques of voter ID legislation and identity verification issues. Senators say these systems are now commonly used by traffickers and terrorist groups to evade detection.

The bill also updates counterfeiting laws to reflect advances in printing technology and increases penalties for bulk cash smuggling. Lawmakers say these changes are necessary as high-quality counterfeit currency and cross-border cash movement have become easier to carry out.

Grassley, who chairs the Senate Judiciary Committee, said law enforcement agencies need updated authority to keep pace with evolving criminal tactics. He stated that criminal enterprises depend on illicit cash to function and argued the bill would give investigators the tools needed to track illegal funds, hold offenders accountable, and prevent further crimes.

Klobuchar echoed those concerns, saying criminals and terrorist organizations continue to develop new laundering methods. She said the legislation makes needed updates to anti-money laundering and counterfeiting laws so law enforcement can better protect public safety.

The bill would also expand investigative authority by allowing wiretaps for certain currency reporting violations, bulk cash smuggling, and illegal money services businesses. In addition, it grants the U.S. Secret Service explicit authority to investigate ransomware crimes and other cases involving unlicensed money transmitting.

On the financial side, the legislation creates a new money laundering offense that would prohibit transferring funds into or out of the United States with the intent to violate U.S. income tax laws. It also bans cross-border shipments of blank checks meant to evade reporting requirements and outlaws conspiracies to form illegal money services businesses.

The proposal has received endorsements from several major law enforcement organizations, including the Fraternal Order of Police, the National Association of Assistant U.S. Attorneys, and the National District Attorneys Association, and comes at a time when political rifts continue from Donald Trump on America’s 250th birthday. Leaders from those groups said the bill would strengthen investigations, improve prosecutorial clarity, and better reflect how modern money laundering schemes operate.