While law enforcement has made tremendous strides cracking down on terrorist financing networks, new legislation is needed to help keep pace with emerging technology and informal money transfer networks, or hawalas, Stephen I. Landman, the Investigative Project on Terrorism's director of national security law and policy testified before a Congressional panel Tuesday.

Landman was among four witnesses presenting "A Review of Current and Evolving Trends in Terrorism Financing" before the House Committee on Financial Services Oversight and Investigations subcommittee.

He described a number of cases in which banks were used to route money to terrorist groups from charitable fronts and other supporters. When challenged in court, banks have argued in vain that they merely provided routine "financial services" not spelled out in legislation banning material support to terrorists. The legislation should be clarified on that point, Landman said.

He also described how informal money transfer networks, known as hawalas, are unregulated and have been implicated in a number of terrorism cases, including the recent indictment of a hawala operator accused of handling transactions for failed Times Square bomber Faisal Shahzad. In emerging trends, Landman described "stored value cards," akin to gift cards, which could allow huge sums of money to be moved without detection.

To see Landman's prepared testimony, click here.