The Treasury Department’s Financial Crimes Enforcement Network permanently ended beneficial ownership information reporting requirements Aug. 18, eliminating a compliance obligation that would have applied to millions of small businesses across the country.
The decision reverses the Biden administration’s implementation of the Corporate Transparency Act and removes what small business owners had described as a burdensome filing mandate, while also eliminating a tool that financial crime investigators said was critical to tracking illicit funds through shell companies.
Small businesses that had begun collecting and filing beneficial ownership data are no longer required to do so, FinCEN said in its announcement. The rollback follows a series of federal court challenges that had already suspended the requirements on a temporary basis.
The Corporate Transparency Act, passed with bipartisan support in 2021, was designed to combat money laundering and financial crime by requiring most small businesses to disclose their true owners to FinCEN. Anti-money laundering advocates had argued the reporting was essential to preventing criminals from hiding behind anonymous corporate structures.
The National Federation of Independent Business praised the decision, calling the reporting requirement "one of the most onerous regulatory mandates ever imposed on small business owners," according to a statement from the group.
Critics of the rollback warned it would leave the United States as one of the only major economies without a comprehensive beneficial ownership registry. The group Global Financial Integrity said the decision "makes America a more attractive destination for those seeking to launder the proceeds of corruption and crime."
The permanent repeal ends months of legal uncertainty for small businesses that had been subject to shifting compliance deadlines as courts issued conflicting rulings on the CTA’s constitutionality.
FinCEN said businesses that had already filed ownership reports would have their data securely maintained but that no new filings would be required.