Treasury Department halts enforcement of Biden’s Corporate Transparency Act requirements, relieving small businesses from burdensome personal data reporting while maintaining focus on foreign entities.
Quick Takes
- President Trump’s administration has suspended enforcement of the Beneficial Ownership Information (BOI) reporting requirements for U.S. businesses.
- The rule required small business owners to share personal information with the federal government in an effort to combat money laundering.
- Treasury will continue to enforce the rule for foreign entities while working on new regulations to formally exempt domestic businesses.
- Over 32 million small businesses were affected by the regulation, which critics called invasive and burdensome.
- The move aligns with Trump’s commitment to reduce regulatory obstacles facing American businesses.
Trump Administration Ends Enforcement of “Invasive” Business Reporting Requirement
In a significant victory for small business owners across America, the Treasury Department announced it will no longer enforce penalties related to the Biden-era Beneficial Ownership Information (BOI) reporting requirements for U.S. citizens and domestic companies. The controversial rule, implemented as part of the Corporate Transparency Act, required owners of businesses with fewer than 20 employees to register their personal information with federal authorities in an effort to combat shell companies and money laundering. The Treasury is now finalizing an emergency regulation to formally suspend the rule for American businesses.
President Donald Trump celebrated the decision, describing the rule as “an absolute disaster for Small Businesses Nationwide.” The announcement comes as a relief to an estimated 32.6 million small businesses that would have been required to submit sensitive personal information to the federal government’s database. U.S. Secretary of the Treasury Scott Bessent called the suspension “a victory for common sense” and emphasized that it aligns with the President’s agenda to unleash American prosperity by reducing regulatory burdens on small businesses.
Regulatory Relief for American Businesses
The BOI reporting requirement, which began in January 2024, mandated that individuals with substantial control over a company or who owned at least 25% of it must report personal details such as legal name, date of birth, address, and identification numbers from documents like driver’s licenses or passports. The rule particularly affected small businesses, which often have few employees and limited resources to manage additional regulatory requirements. Despite former Treasury Secretary Janet Yellen’s claim that the burden would be minimal at $85 per business, industry leaders argued the true cost was much higher.
Although enforcement has been suspended for domestic businesses, the Treasury Department emphasized that the rule will still apply to foreign companies operating in the United States. This approach maintains scrutiny on potential international money laundering while providing relief to American entrepreneurs. More than 100,000 businesses had already filed beneficial ownership information with the Treasury as of January 2024, demonstrating the widespread impact the regulation had begun to have on the business community.
Small Business Advocates Applaud Decision
Small business advocacy groups have welcomed the Treasury’s decision, with the National Small Business Association previously describing the BOI reporting requirements as “a massive burden.” The organization had called for legislative intervention to address money laundering concerns without imposing excessive requirements on small businesses. Similarly, Republican lawmakers had been working to provide relief through legislative channels, with Senator Tim Scott and colleagues on the Senate Banking Committee introducing measures to extend reporting deadlines.
The rule had faced legal challenges even before the Treasury’s enforcement suspension, with a small business lobbying group filing a lawsuit to block the requirement. Business leaders expressed concerns about privacy, security, and redundancy with other government databases. Critics argued that the rule placed an undue burden on legitimate businesses while sophisticated criminal enterprises would likely find ways to circumvent the requirements. The Treasury’s decision effectively addresses these concerns for American companies while maintaining focus on potential foreign threats.
New Leadership, New Direction
The enforcement suspension coincides with new leadership at key economic positions. Kelly Loeffler, a Georgia businesswoman and former senator, was recently confirmed by the U.S. Senate to lead the Small Business Administration with a 52-46 vote. Together with Treasury Secretary Bessent, these appointments signal the administration’s commitment to creating a more business-friendly regulatory environment. The Treasury Department’s Financial Crimes and Enforcement Network, which oversees the BOI database, will continue its work focused on foreign entities.
“This is a victory for common sense. Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.” – U.S. Secretary of the Treasury Scott Bessent
While supporters of the BOI rule, including some Democrats and progressive organizations, have argued it provides law enforcement with valuable tools to combat financial crimes, the Trump administration has prioritized reducing regulatory burdens on American businesses. This decision represents a significant policy shift that aligns with the President’s broader economic agenda of cutting red tape and supporting American enterprise, particularly for small business owners who form the foundation of local economies across the nation.
