The Washington Times published an op-ed by Jeff Brabant, NFIB’s Vice President of Federal Government Relations, addressing the detrimental effects of the Corporate Transparency Act’s (CTA) beneficial ownership (BOI) reporting requirements on small businesses. Brabant articulates that the mandate, which compels small business owners to register their personal information with the Financial Crimes Enforcement Network (FinCEN), imposes an undue burden on Main Street enterprises.
In his op-ed, Brabant states: “More than 32 million small businesses are facing potential ruin — not just of their livelihood but also of their personal freedom. By the end of this year, small business owners and their senior employees must register their personal information with the Financial Crimes Enforcement Network. If they don’t, they’ll face the loss of their business, criminal penalties and even jail time.”
Brabant highlights the financial implications: “Now, Main Street is paying the price. FinCEN estimates the mandate will cost small businesses more than $73.1 billion over 10 years. By contrast, when the banks had to do this reporting, it cost only $1.5 billion. That means the rule is over 48 times as burdensome for small businesses. Main Street pays massively more because small businesses don’t have nearly the same scale or efficiency as Wall Street banks.”
He further emphasizes: “This regulation will crush small businesses, either with costs or criminal penalties. The National Federation of Independent Business has found that 83% of small businesses don’t even know the rule exists. That puts them at risk of massive fines or even jail time. They shouldn’t have to fear that, nor should they have to comply with such a burdensome mandate in the first place."
Brabant concludes with a call for legislative action: "The Corporate Transparency Act must be repealed. It was poorly conceived and poorly written, and it’s already being poorly executed…The last thing that 32 million small businesses need is another costly mandate backed up by the threat of criminal penalties.”
NFIB endorses the Repealing Big Brother Overreach Act, which aims to revoke CTA's requirements and alleviate its impact on small businesses. In May, NFIB initiated a lawsuit challenging CTA; this legal action remains pending.
