The Deregulation Gambit: Trump’s Repeal of AMLA and FATCA

In a bold move emblematic of his second term, President Donald Trump, backed by House and Senate Republicans, repealed the Anti-Money Laundering Act of 2020 (AMLA) and the Foreign Account Tax Compliance Act (FATCA) in 2025. Marketed as a strategy to reduce bureaucracy and fuel economic growth, the decision sent shockwaves through global financial systems and exposed cracks in the U.S.'s economic governance.

Without AMLA's mandatory ownership reporting, shell companies proliferated, transforming the United States into a magnet for illicit financial flows. Meanwhile, the repeal of FATCA eliminated safeguards requiring foreign banks to report U.S. account holders, creating a clear path for wealth transfers to offshore accounts. These changes marked a pivot from financial transparency to prioritizing an open capital account for perceived geopolitical advantage.

The consequences were immediate and severe. Real estate markets in New York, Los Angeles, and Miami overheated as billions in opaque wealth flowed into luxury properties. Internationally, the Financial Action Task Force (FATF) placed select U.S. states under increased monitoring, prompting global banks to restrict transactions involving American entities in these jurisdictions.

Domestically, the economic impact rippled across sectors. Tax revenues plummeted as wealthy individuals and corporations exploited deregulation, deepening income inequality. Small and medium-sized enterprises faced distorted credit markets flooded with unregulated capital, while foreign investors, wary of reputational risks, redirected funds to more stable jurisdictions.

The geopolitical fallout was profound. European allies decried the United States’ retreat from leadership in financial governance, while adversaries like Russia and China exploited the regulatory void. By undermining global transparency norms, Republicans' deregulation gambit left the U.S. increasingly isolated in a world leaning toward cooperative financial crime prevention. The long-term consequences remain immeasurable.