The Treasury Department’s Financial Crimes Enforcement Network permanently eliminated beneficial ownership information reporting requirements under the Corporate Transparency Act, the agency announced Aug. 11, relieving an estimated 32 million small businesses of the compliance mandate.
The rollback removes a federal anti-money-laundering database that had required millions of business owners to report the identities of individuals who own or control their companies, ending a program that had generated significant pushback from the small business community.
FinCEN’s action is a permanent regulatory reversal, not a temporary suspension, of the Biden-era initiative, according to Treasury. The Corporate Transparency Act had been enacted with bipartisan support in 2021 as a tool to combat shell company abuse and illicit finance.
Small business owners had faced compliance costs and potential penalties under the reporting program, which required detailed personal information about beneficial owners to be submitted to a federal database. Industry groups had argued the requirements were disproportionately burdensome for legitimate small businesses.
Critics of the rollback argue the elimination of beneficial ownership reporting removes an important tool for tracking illicit finance, money laundering and shell company abuse. Anti-corruption groups had supported the reporting mandate as essential for financial transparency.
The action creates a notable tension in administration policy: Treasury is simultaneously expanding sanctions enforcement against illicit finance networks while eliminating a domestic transparency tool designed to serve similar goals.