[House Report 119-701]
[From the U.S. Government Publishing Office]
119th Congress] [Report
HOUSE OF REPRESENTATIVES
2d Session] [119-701
======================================================================
REPEALING BIG BROTHER OVERREACH ACT
_______
June 18, 2026.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 425]
The Committee on Financial Services, to whom was referred
the bill (H.R. 425) to repeal the Corporate Transparency Act,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Consideration.......................................... 4
Related Hearings................................................. 6
Committee Votes.................................................. 7
Committee Oversight Findings..................................... 14
Performance Goals and Objectives................................. 14
Committee Cost Estimate.......................................... 14
New Budget Authority and CBO Cost Estimate....................... 14
Unfunded Mandates Statement...................................... 14
Earmark Statement................................................ 14
Federal Advisory Committee Act Statement......................... 15
Applicability to the Legislative Branch.......................... 15
Duplication of Federal Programs.................................. 15
Section-by-Section Analysis of the Legislation................... 15
Changes in Existing Law Made by the Bill, as Reported............ 15
Documents Included by Unanimous Consent.......................... 35
Minority Views................................................... 82
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Repealing Big Brother Overreach Act''.
SEC. 2. BENEFICIAL OWNERSHIP INFORMATION REPORTING REQUIREMENTS.
(a) In General.--Section 5336 of title 31, United States Code, is
amended--
(1) by inserting ``foreign'' after ``Beneficial'' each place
such term appears in heading or text;
(2) by inserting ``foreign'' after ``beneficial'' each place
such term appears in heading or text (and conforming the item
relating to such section 5336 in the table of contents for
chapter 53 of title 31, United States Code, accordingly); and
(3) in subsection (a)--
(A) in paragraph (3)(A), by inserting after
``individual who'' the following: ``is a foreign person
and''; and
(B) in paragraph (11)(A), by striking ``that is'' and
all that follows through ``(ii) formed'' and inserting
``that is formed''.
(b) Deletion of Data Relating to Non-reporting Companies.--Not later
than 90 days after the date of enactment of this Act, the Financial
Crimes Enforcement Network shall delete all beneficial ownership
information collected pursuant to section 5336 of title 31, United
States Code, with respect to--
(1) any individual who is not a foreign beneficial owner (as
such term is defined under such section 5336); or
(2) a corporation, limited liability company, or other
similar entity that is not a reporting company (as such term is
defined under such section 5336).
Purpose and Summary
H.R. 425, the Repealing Big Brother Overreach Act, was
introduced on January 15, 2025, by Republican Representative
Warren Davidson (OH-08). As reported, H.R. 425 modifies the
beneficial ownership reporting regime to exclusively cover
foreign owners of foreign businesses that meet the criteria of
a reporting company as defined in the Corporate Transparency
Act (CTA). The bill further requires the deletion of beneficial
ownership information collected on Americans.
Background and Need for Legislation
On January 1, 2021, Congress enacted the William M. (Mac)
Thornberry National Defense Authorization Act for Fiscal Year
2021 (NDAA).\1\ Division F of the FY21 NDAA, also known as the
Anti-Money Laundering Act (AMLA), made significant reforms to
the U.S. anti-money laundering regime. Division F includes AMLA
as well as the CTA.\2\
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\1\Library of Congress, Congress.gov, William M. (Mac) Thornberry
National Defense Authorization Act for Fiscal Year 2021, https://
www.congress.gov/bill/116th-congress/house-bill/6395/text.
\2\Pub. L. No. 116-283 (2021).
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The AMLA strengthens, modernizes, and streamlines the
existing anti-money laundering regime. In addition, AMLA
directs the Financial Crimes Enforcement Network of the
Treasury Department (FinCEN) to work closely with regulatory,
national security, and law enforcement to identify risks and
priorities and provide feedback to industry partners.
The CTA established beneficial ownership information (BOI)
reporting requirements for corporations, limited liability
companies, and other similar entities formed or registered to
do business in the United States. The CTA authorizes FinCEN to
collect that information and share it with authorized
government authorities and financial institutions, subject to
effective safeguards and controls.
The goal of the CTA was to identify the beneficial owners
of small legal entities registered to do business in the United
States due to concerns that malign actors could use such
corporate structures for money laundering, drug trafficking,
terrorist financing, and other illicit activities. The CTA has
proven controversial under subsequent rulemakings.
FinCEN's beneficial ownership reporting regime took effect
on January 1, 2024, meaning approximately 32.6 million small
businesses in the U.S. had until January 13, 2025, to file
their BOI.\3\ Due to ongoing legal developments, the reporting
requirement was paused pending action by the U.S. District
Court for the Eastern District of Texas.\4\ On February 18,
2025, following the Court's decision, Treasury announced that
the beneficial ownership reporting requirements were back in
effect and BOI reports, for most companies, would be due March
21, 2025. On March 2, 2025, Treasury announced it would be
issuing an IFR that would revise the definition of ``reporting
company'' and only require foreign companies to report their
BOI to FinCEN.\5\ FinCEN now exempts Americans and domestic
companies from the BOI reporting requirements. H.R. 425 would
codify the terms of the interim final rule in statute.
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\3\Aimee Picchi, Here's what to know about the CTA and its Jan. 13
rule for small businesses to register with FinCEN, CBS News, December
26, 2024, https://www.cbsnews.com/news/
corporate-transparency-act-cta-fincen-ruling-injunction-what-it-means/.
\4\Id.
\5\Press Release, Treasury Department, Treasury Department
Announces Suspension of Enforcement of Corporate Transparency Act
Against U.S. Citizens and Domestic Reporting Companies (March 2, 2025),
https://home.treasury.gov/news/press-releases/sb0038.
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As FinCEN observes in its IFR, ``The CTA also authorizes
the Secretary of the Treasury (Secretary) to exempt any other
`entity or class of entities' for which the Secretary, with the
written concurrence of the Attorney General and the Secretary
of Homeland Security, has, by regulation, determined that
`requiring beneficial ownership information from the entity or
class of entities . . . would not serve the public interest'
and `would not be highly useful in national security,
intelligence, and law enforcement agency efforts to detect,
prevent, or prosecute money laundering, the financing of
terrorism, proliferation finance, serious tax fraud, or other
crimes.'\6\ In addition, section 5318(a)(7) of the BSA provides
that the Secretary may make appropriate exemptions from a
requirement in the BSA or regulations prescribed under the BSA.
Taken together, these provisions authorize the issuance of
regulations that may provide additional exemptions from the
requirements of the CTA.''\7\ The IFR brings the data collected
under the CTA into line with these objectives.
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\6\31 U.S.C. 5336(a)(11)(B)(xxiv).
\7\Financial Crimes Enforcement Network, Beneficial Ownership
Information Reporting Requirement Revision and Deadline Extension, 90
Fed. Reg. 13,688 (March 26, 2025) (interim final rule).
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The CTA, as originally crafted and expansively interpreted
by the Biden Administration, imposes excessive filing burdens
and undermines privacy rights. It also ignores the concerns of
America's smallest businesses by replacing the risk-based
approach inherent in anti-money laundering practices with a
zero-tolerance approach that prioritizes compliance over
deterrence.
The CTA has several structural flaws, the following of
which are the most problematic for America's small businesses:
1. The CTA Is Cumbersome: The CTA's regulatory burden
has proven far more complex and invasive than
originally conceived. In an assessment of the cost
savings from deregulatory action taken by the Trump
Administration, the Office of Management and Budget and
the Office of Information and Regulatory Affairs
estimate that scoping the CTA to foreign persons and
companies saves $128.6 billion, the single largest
deregulatory action taken by the Administration in
Fiscal Year 2025.\8\
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\8\Press Release, The White House, White House Office of Management
and Budget's Office of Information and Regulatory Affairs Releases End
of Year Deregulatory Stats: Showing the Trump Administration Has Best
Deregulation Year in History (December 19, 2025), https://
www.whitehouse.gov/briefings-statements/2025/12/32750/.
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2. Criminal Penalties: The CTA imposes criminal
penalties for noncompliance, creating significant
liability for small businesses across the nation.
3. The CTA is Redundant to the Consumer Due Diligence
Rule (CDD): Banks are already required to verify the
beneficial ownership information of their clients under
the CDD. This creates decentralized databases of BOI
that are available for the investigation and
prosecution of illicit financial activity.
4. Ineffectiveness: While the use of shell
corporations for illicit activity is well known,
beneficial ownership registries around the world have
failed to stop money laundering or terror finance, as
can be readily seen from Cyprus, Turkey, and the United
Arab Emirates.
5. Focus on Compliance Over Law Enforcement: The CTA,
as implemented by the Biden Administration, would cause
FinCEN to collect tens of millions of BOI records,
piling up reports on law-abiding citizens rather than
focusing on potential criminal activity. This
compliance-focused approach prioritizes the collection
of information over prosecution, an approach similar to
BSA requirements under which millions of Suspicious
Activity Reports and Currency Transaction Reports are
filed each year without a commensurate benefit to law-
enforcement.
6. Data Security: The CTA requires FinCEN to retain
BOI for at least five years, generating additional risk
for millions of Americans. As public-sector data
breaches have shown, government, including the Treasury
Department, is not immune from cyberattacks. A
centralized database of personally identifiable
information on a significant share of Americans creates
an extremely valuable target for nation-state actors
and cybercriminals.
Committee Consideration
119TH CONGRESS
On January 15, 2025, Representative Davidson introduced
H.R. 425, the Repealing Big Brother Overreach Act, with
Representatives Troy Balderson (R-OH), Jack Bergman (R-MI),
Andy Biggs (R-AZ), Vern Buchanan (R-FL), Eric Burlison (R-MO),
Kat Cammack (R-FL), Juan Ciscomani (R-AZ), Michael Cloud (R-
TX), Andrew Clyde (R-GA), Elijah Crane (R-AZ), Neal Dunn (R-
FL), Chuck Edwards (R-NC), Jake Ellzey (R-TX), Ron Estes (R-
KS), Mike Ezell (R-MS), Brad Finstad (R-MN), Michelle Fischbach
(R-MN), Chuck Fleischmann (R-TN), Virginia Foxx (R-NC), Russ
Fulcher (R-ID), Sam Graves (R-MO), Marjorie Taylor Greene (R-
GA), Glenn Grothman (R-WI), Michael Guest (R-MS), Harriet
Hageman (R-WY), Kevin Hern (R-OK), Erin Houchin (R-IN), Richard
Hudson (R-NC), Dusty Johnson (R-SD), Darin LaHood (R-IL), Nick
Langworthy (R-NY), Laurel Lee (R-FL), Nancy Mace (R-SC), John
Moolenaar (R-MI), Barry Moore (R-AL), Ralph Norman (R-SC),
Andrew Ogles (R-TN), Scott Perry (R-PA), August Pfluger (R-TX),
John Rose (R-TN), David Rouzer (R-NC), Chip Roy (R-TX), Michael
Rulli (R-OH), David Schweikert (R-AZ), Jason Smith (R-MO),
Adrian Smith (R-NE), Pete Stauber (R-MN), Claudia Tenney (R-
NY), Glenn Thompson (R-PA), Thomas Tiffany (R-WI), Beth Van
Duyne (R-TX), Randy Weber (R-TX), Ryan Zinke (R-MT), Mike
Collins (R-GA), Mike Bost (R-IL), Trent Kelly (R-MS), Scott
Franklin (R-FL), Aaron Bean (R-FL), Marlin Stutzman (R-IN),
David Taylor (R-OH), Tom Barrett (R-MI), Troy Downing (R-MT),
Brandon Gill (R-TX), Rudy Yakym (R-IN), Derrick Van Orden (R-
WI), Stephanie Bice (R-OK), Robert Onder (R-MO), and Morgan
Griffith (R-VA) as original cosponsors.
Representatives Greg Murphy (R-NC), Diana Harshbarger (R-
TN), Rick Allen (R-GA), Nicholas Begich (R-AK), Derek Schmidt
(R-KS), Tom Cole (R-OK), Keith Self (R-TX), Jay Obernolte (R-
CA), Jeff Crank (R-CO), Pat Fallon (R-TX), Russell Fry (R-SC),
James Comer (R-KY), Gary Palmer (R-AL), Don Bacon (R-NE), Paul
Gosar (R-AZ), Troy Nehls (R-TX), Daniel Webster (R-FL), Mike
Kennedy (R-UT), John McGuire (R-VA), Gus Bilirakis (R-FL), Greg
Steube (R-FL), Mariannette Miller-Meeks (R-IA), Jennifer
Kiggans (R-VA), Dale Strong (R-AL), Carol Miller (R-WV), Tim
Walberg (R-MI), Zach Nunn (R-IA), Mark Green (R-TN), Clay
Higgins (R-LA), Ashley Hinson (R-IA), Craig Goldman (R-TX),
Bruce Westerman (R-AR), Max Miller (R-OH), Scott DesJarlais (R-
TN), Lance Gooden (R-TX), Riley Moore (R-WV), Dan Newhouse (R-
WA), Nathaniel Moran (R-TX), Tim Moore (R-NC), John Carter (R-
TX), Mike Carey (R-OH), Gabe Evans (R-CO), Randy Feenstra (R-
IA), Byron Donalds (R-FL), Jefferson Shreve (R-IN), Cory Mills
(R-FL), Tony Wied (R-WI), Nicole Malliotakis (R-NY), Robert
Latta (R-OH), Mike Kelly (R-PA), Buddy Carter (R-GA), David
Valadao (R-CA), Wesley Hunt (R-TX), Lloyd Smucker (R-PA), Mike
Flood (R-NE), William Timmons (R-SC), Julie Fedorchak (R-ND),
Josh Brecheen (R-OK), Ronny Jackson (R-TX), Mark Alford (R-MO),
Michael Turner (R-OH), Mark Amodei (R-NV), James Baird (R-IN),
Jeff Hurd (R-CO), Pete Sessions (R-TX), Doug LaMalfa (R-CA),
Mark Messmer (R-IN), Richard McCormick (R-GA), Addison McDowell
(R-NC), Tim Burchett (R-TN), Tony Gonzales (R-TX), Abe Hamadeh
(R-AZ), Celeste Maloy (R-UT), Mary Miller (R-IL), Andy Harris
(R-MD), Robert Bresnahan (R-PA), Jim Jordan (R-OH), Jimmy
Patronis (R-FL), Mark Harris (R-NC), Burgess Owens (R-UT),
Lauren Boebert (R-CO), Brian Jack (R-GA), David Kustoff (R-TN),
Michael Simpson (R-ID), Bill Huizenga (R-MI), Jodey Arrington
(R-TX), Ryan Mackenzie (R-PA), Rob Wittman (R-VA), Michael
Lawler (R-NY), Andy Barr (R-KY), Harold Rogers (R-KY), Randy
Fine (R-FL), David Joyce (R-OH), John Joyce (R-PA), Tracey Mann
(R-KS), Julia Letlow (R-LA), Mike Rogers (R-AL), Brett Guthrie
(R-KY), Vince Fong (R-CA), Brian Babin (R-TX), Robert Aderholt
(R-AL), Sheri Biggs (R-SC), Michael McCaul (R-TX), Nick LaLota
(R-NY), Jefferson Van Drew (R-NJ), Blake Moore (R-UT), Maria
Salazar (R-FL), Ben Cline (R-VA), Anna Paulina Luna (R-FL),
Elise Stefanik (R-NY), Joe Wilson (R-SC), Cliff Bentz (R-OR),
Thomas Massie (R-KY), Ken Calvert (R-CA), Thomas Kean (R-NJ),
Michael Baumgartner (R-WA), Austin Scott (R-GA), Darrell Issa
(R-CA), Daniel Meuser (R-PA), John Rutherford (R-FL), Brian
Mast (R-FL), Monica De La Cruz (R-TX), Carlos Gimenez (R-FL),
Pat Harrigan (R-NC), and Brad Knott (R-NC) were added
subsequently as cosponsors.
The bill was referred solely to the Committee on Financial
Services. This bill was noticed for consideration in the April
1, 2025, Subcommittee on National Security, Illicit Finance,
and International Financial Institutions hearing titled
``Following the Money: Tools and Techniques to Combat Fraud.''
On April 21, 2026, the Committee on Financial Services met
in open session to consider, among others, H.R. 425. The
Committee ordered H.R. 425, as amended, to be reported with a
favorable recommendation to the House of Representatives.
118TH CONGRESS
On April 29, 2024, Representative Davidson introduced H.R.
8147, the Repealing Big Brother Overreach Act, with
Representatives Hageman, Grothman, Edwards, Norman, Ogles, Bill
Posey (R-FL), Hern, Bob Good (R-VA), Fischbach, Fallon, and
Kelly Armstrong (R-ND) as original cosponsors. Representatives
Van Duyne, Fulcher, Perry, Steube, Finstad, Dan Bishop (R-NC),
Webster, Owens, Higgins, Mills, Nehls, Debbie Lesko (R-AZ),
Alex Mooney (R-WV), Self, Rose, Comer, Guest, Massie, Jim Banks
(R-IN), Brecheen, Ezell, Cammack, Murphy, Bilirakis, Moore,
Brad Wenstrup (R-OH), Lisa McClain (R-MI), Ellzey, Miller,
Langworthy, Roy, Smith, Bost, Arrington, Greene, Moran,
Burlison, Bacon, Burchett, Miller-Meeks, Rulli, Mace, Weber,
Tenney, Clyde, Smith, Buchanan, Carey, Dunn, Biggs, Franklin,
Zinke, Graves, Wilson, French Hill (R-AR), Johnson, Feenstra,
Van Orden, Westerman, Cole, Palmer, Houchin, Estes, Cloud,
Schweikert, Bergman, Tiffany, Foxx, Balderson, Harshbarger,
Stauber, Hudson, DesJarlais, Kiggans, Bentz, LaHood, Crane,
Pfluger, Green, Fleischmann, Rouzer, Gosar, Obernolte,
Moolenaar, Thompson, Kelly, Ciscomani, Lee, and Hinson (R-IA)
were added subsequently as cosponsors. This bill is an earlier
iteration of H.R. 8147.
The bill was referred solely to the Committee on Financial
Services. There was no further action on H.R. 8147 in the 118th
Congress.
Related Hearings
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearing was used to
develop H.R. 425:
On April 1, 2025, the Subcommittee on National Security,
Illicit Finance, and International Financial Institutions held
a hearing titled ``Following the Money: Tools and Techniques to
Combat Fraud.'' H.R. 425 was noticed for consideration in the
hearing. The Subcommittee heard testimony from: Mr. Darrin
McLaughlin, Executive Vice President-Chief BSA/AML & Sanctions
Officer, Flagstar Bank on behalf of the American Bankers
Association (ABA); Ms. Jacqueline Burns Koven, Head of Cyber
Threat Intelligence, Chainalysis; Mr. Jeff Brabant, Vice
President, Federal Government Relations, National Federation of
Independent Business (NFIB); and Ms. Kathy Stokes, Director,
Fraud Prevention Programs, AARP.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include record
votes on the motion to report legislation and amendments
thereto.
On April 21, 2026, the Committee ordered H.R. 425, as
amended, to be reported favorably to the House by a recorded
vote of 26 yeas and 25 nays, a quorum being present. (Record
Vote No. FC-269).
The Committee considered the following amendments to H.R.
425:
Representative Davidson offered an amendment
in the nature of a substitute, which modifies the CTA
to require the reporting of beneficial ownership
information for non-American owners of foreign
companies doing business in the United States. The ANS
would also require the deletion of beneficial ownership
information already collected on Americans. This
amendment was adopted by a voice vote.
Ranking Member Maxine Waters (D-CA) offered
an amendment (No. 8), designated HR425_08. This
amendment mandates that the legislation does not exempt
entities the beneficial ownership information for which
would be highly useful to national security agencies
and law enforcement in the detection, prevention or
prosecution of crimes included in the FBI's Internet
Crime Report. This amendment failed by a recorded vote
of 24 yeas and 27 nays, a quorum being present. (Record
Vote No. FC-265).
Representative Joyce Beatty (D-OH) offered
an amendment (No. 9), designated HR425_10. This
amendment mandates that the legislation does not exempt
entities the beneficial ownership information for which
would be highly useful to national security agencies
and law enforcement in the detection, prevention or
prosecution of crimes by transnational criminal
organizations. This amendment failed by a recorded vote
of 24 yeas and 27 nays, a quorum being present. (Record
Vote No. FC-266).
Representative Vicente Gonzalez (D-TX)
offered an amendment (No. 10), designated HR425_09.
This amendment mandates that the legislation does not
exempt entities the beneficial ownership information
for which would be highly useful to national security
agencies and law enforcement in the detection,
prevention or prosecution of fraud and scams involving
older Americans or children. This amendment failed by a
recorded vote of 24 yeas and 27 nays, a quorum being
present. (Record Vote No. FC-267).
Representative Waters offered an amendment
(No. 11), designated HR425_04. This amendment mandates
that the legislation does not exempt entities the
beneficial ownership information for which would be
highly useful to national security agencies and law
enforcement in the detection, prevention or prosecution
of crimes committed by Jeffrey Epstein and his
associates. This amendment failed by a recorded vote of
25 yeas and 26 nays, a quorum being present. (Record
Vote No. FC-268).
Committee Oversight Findings
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 425 is to codify
FinCEN's interim final rule relating to ``Beneficial Ownership
Information Reporting Requirement Revision and Deadline
Extension'' and delete beneficial ownership information
collected pursuant to previous rulemaking.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 425. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office (CBO). However,
pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee will adopt as its own
the cost estimate by the Director of the CBO once it has been
prepared.
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee will adopt as
its own the cost estimate for the bill prepared by the Director
of the CBO. However, a cost estimate was not made available to
the Committee in time for the filing of this report. The
Chairman of the Committee shall cause such estimate to be
printed in the Congressional Record upon its receipt by the
Committee.
Unfunded Mandates Statement
The Committee has requested but not received from the
Director of the CBO an estimate of the Federal mandates
pursuant to section 423 of the Unfunded Mandates Reform Act.
The Chairman of the Committee shall cause such estimate to be
printed in the Congressional Record upon its receipt by the
Committee.
Earmark Statement
In compliance with clause 9 of rule XXI of the Rules of the
House of Representatives, this bill, as reported, contains no
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.
Federal Advisory Committee Act Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 states that the Act may be cited as the
``Repealing Big Brother Overreach Act''.
Section 2. Beneficial foreign ownership information reporting
requirements
Section 2 modifies the CTA's BOI reporting requirements to
apply exclusively to foreign owners of foreign businesses that
otherwise meet the criteria of a reporting company under the
CTA. The section further requires the deletion of beneficial
ownership information collected on Americans within 90 days of
enactment.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
TITLE 31, UNITED STATES CODE
* * * * * * *
SUBTITLE IV--MONEY
* * * * * * *
CHAPTER 53--MONETARY TRANSACTIONS
SUBCHAPTER I--CREDIT AND MONETARY EXPANSION
Sec.
5301. Buying obligations of the United States Government.
SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS
* * * * * * *
5336. Beneficial foreign ownership information reporting requirements.
* * * * * * *
SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS
* * * * * * *
Sec. 5336. Beneficial foreign ownership information reporting
requirements
(a) Definitions.--In this section:
(1) Acceptable identification document.--The term
``acceptable identification document'' means, with
respect to an individual--
(A) a nonexpired passport issued by the
United States;
(B) a nonexpired identification document
issued by a State, local government, or Indian
Tribe to the individual acting for the purpose
of identification of that individual;
(C) a nonexpired driver's license issued by a
State; or
(D) if the individual does not have a
document described in subparagraph (A), (B), or
(C), a nonexpired passport issued by a foreign
government.
(2) Applicant.--The term ``applicant'' means any
individual who--
(A) files an application to form a
corporation, limited liability company, or
other similar entity under the laws of a State
or Indian Tribe; or
(B) registers or files an application to
register a corporation, limited liability
company, or other similar entity formed under
the laws of a foreign country to do business in
the United States by filing a document with the
secretary of state or similar office under the
laws of a State or Indian Tribe.
(3) Beneficial foreign owner.--The term ``beneficial
foreign owner''--
(A) means, with respect to an entity, an
individual who is a foreign person and,
directly or indirectly, through any contract,
arrangement, understanding, relationship, or
otherwise--
(i) exercises substantial control
over the entity; or
(ii) owns or controls not less than
25 percent of the ownership interests
of the entity; and
(B) does not include--
(i) a minor child, as defined in the
State in which the entity is formed, if
the information of the parent or
guardian of the minor child is reported
in accordance with this section;
(ii) an individual acting as a
nominee, intermediary, custodian, or
agent on behalf of another individual;
(iii) an individual acting solely as
an employee of a corporation, limited
liability company, or other similar
entity and whose control over or
economic benefits from such entity is
derived solely from the employment
status of the person;
(iv) an individual whose only
interest in a corporation, limited
liability company, or other similar
entity is through a right of
inheritance; or
(v) a creditor of a corporation,
limited liability company, or other
similar entity, unless the creditor
meets the requirements of subparagraph
(A).
(4) Director.--The term ``Director'' means the
Director of FinCEN.
(5) FinCEN.--The term ``FinCEN'' means the Financial
Crimes Enforcement Network of the Department of the
Treasury.
(6) FinCEN identifier.--The term ``FinCEN
identifier'' means the unique identifying number
assigned by FinCEN to a person under this section.
(7) Foreign person.--The term ``foreign person''
means a person who is not a United States person, as
defined in section 7701(a) of the Internal Revenue Code
of 1986.
(8) Indian tribe.--The term ``Indian Tribe'' has the
meaning given the term ``Indian tribe'' in section 102
of the Federally Recognized Indian Tribe List Act of
1994 (25 U.S.C. 5130).
(9) Lawfully admitted for permanent residence.--The
term ``lawfully admitted for permanent residence'' has
the meaning given the term in section 101(a) of the
Immigration and Nationality Act (8 U.S.C. 1101(a)).
(10) Pooled investment vehicle.--The term ``pooled
investment vehicle'' means--
(A) any investment company, as defined in
section 3(a) of the Investment Company Act of
1940 (15 U.S.C. 80a-3(a)); or
(B) any company that--
(i) would be an investment company
under that section but for the
exclusion provided from that definition
by paragraph (1) or (7) of section 3(c)
of that Act (15 U.S.C. 80a-3(c)); and
(ii) is identified by its legal name
by the applicable investment adviser in
its Form ADV (or successor form) filed
with the Securities and Exchange
Commission.
(11) Reporting company.--The term ``reporting
company''--
(A) means a corporation, limited liability
company, or other similar entity [that is--]
[(i) created by the filing of a
document with a secretary of state or a
similar office under the law of a State
or Indian Tribe; or]
[(ii) formed] that is formed under
the law of a foreign country and
registered to do business in the United
States by the filing of a document with
a secretary of state or a similar
office under the laws of a State or
Indian Tribe; and
(B) does not include--
(i) an issuer--
(I) of a class of securities
registered under section 12 of
the Securities Exchange Act of
1934 (15 U.S.C. 78l); or
(II) that is required to file
supplementary and periodic
information under section 15(d)
of the Securities Exchange Act
of 1934 (15 U.S.C. 78o(d));
(ii) an entity--
(I) established under the
laws of the United States, an
Indian Tribe, a State, or a
political subdivision of a
State, or under an interstate
compact between 2 or more
States; and
(II) that exercises
governmental authority on
behalf of the United States or
any such Indian Tribe, State,
or political subdivision;
(iii) a bank, as defined in--
(I) section 3 of the Federal
Deposit Insurance Act (12
U.S.C. 1813);
(II) section 2(a) of the
Investment Company Act of 1940
(15 U.S.C. 80a-2(a)); or
(III) section 202(a) of the
Investment Advisers Act of 1940
(15 U.S.C. 80b-2(a));
(iv) a Federal credit union or a
State credit union (as those terms are
defined in section 101 of the Federal
Credit Union Act (12 U.S.C. 1752));
(v) a bank holding company (as
defined in section 2 of the Bank
Holding Company Act of 1956 (12 U.S.C.
1841)) or a savings and loan holding
company (as defined in section 10(a) of
the Home Owners' Loan Act (12 U.S.C.
1467a(a)));
(vi) a money transmitting business
registered with the Secretary of the
Treasury under section 5330;
(vii) a broker or dealer (as those
terms are defined in section 3 of the
Securities Exchange Act of 1934 (15
U.S.C. 78c)) that is registered under
section 15 of that Act (15 U.S.C. 78o);
(viii) an exchange or clearing agency
(as those terms are defined in section
3 of the Securities Exchange Act of
1934 (15 U.S.C. 78c)) that is
registered under section 6 or 17A of
that Act (15 U.S.C. 78f, 78q-1);
(ix) any other entity not described
in clause (i), (vii), or (viii) that is
registered with the Securities and
Exchange Commission under the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.);
(x) an entity that--
(I) is an investment company
(as defined in section 3 of the
Investment Company Act of 1940
(15 U.S.C. 80a-3)) or an
investment adviser (as defined
in section 202 of the
Investment Advisers Act of 1940
(15 U.S.C. 80b-2)); and
(II) is registered with the
Securities and Exchange
Commission under the Investment
Company Act of 1940 (15 U.S.C.
80a-1 et seq.) or the
Investment Advisers Act of 1940
(15 U.S.C. 80b-1 et seq.);
(xi) an investment adviser--
(I) described in section
203(l) of the Investment
Advisers Act of 1940 (15 U.S.C.
80b-3(l)); and
(II) that has filed Item 10,
Schedule A, and Schedule B of
Part 1A of Form ADV, or any
successor thereto, with the
Securities and Exchange
Commission;
(xii) an insurance company (as
defined in section 2 of the Investment
Company Act of 1940 (15 U.S.C. 80a-2));
(xiii) an entity that--
(I) is an insurance producer
that is authorized by a State
and subject to supervision by
the insurance commissioner or a
similar official or agency of a
State; and
(II) has an operating
presence at a physical office
within the United States;
(xiv)(I) a registered entity (as
defined in section 1a of the Commodity
Exchange Act (7 U.S.C. 1a)); or
(II) an entity that is--
(aa)(AA) a futures commission
merchant, introducing broker,
swap dealer, major swap
participant, commodity pool
operator, or commodity trading
advisor (as those terms are
defined in section 1a of the
Commodity Exchange Act (7
U.S.C. 1a)); or
(BB) a retail foreign
exchange dealer, as described
in section 2(c)(2)(B) of that
Act (7 U.S.C. 2(c)(2)(B)); and
(bb) registered with the
Commodity Futures Trading
Commission under the Commodity
Exchange Act (7 U.S.C. 1 et
seq.);
(xv) a public accounting firm
registered in accordance with section
102 of the Sarbanes-Oxley Act of 2002
(15 U.S.C. 7212);
(xvi) a public utility that provides
telecommunications services, electrical
power, natural gas, or water and sewer
services within the United States;
(xvii) a financial market utility
designated by the Financial Stability
Oversight Council under section 804 of
the Payment, Clearing, and Settlement
Supervision Act of 2010 (12 U.S.C.
5463);
(xviii) any pooled investment vehicle
that is operated or advised by a person
described in clause (iii), (iv), (vii),
(x), or (xi);
(xix) any--
(I) organization that is
described in section 501(c) of
the Internal Revenue Code of
1986 (determined without regard
to section 508(a) of such Code)
and exempt from tax under
section 501(a) of such Code,
except that in the case of any
such organization that loses an
exemption from tax, such
organization shall be
considered to be continued to
be described in this subclause
for the 180-day period
beginning on the date of the
loss of such tax-exempt status;
(II) political organization
(as defined in section
527(e)(1) of such Code) that is
exempt from tax under section
527(a) of such Code; or
(III) trust described in
paragraph (1) or (2) of section
4947(a) of such Code;
(xx) any corporation, limited
liability company, or other similar
entity that--
(I) operates exclusively to
provide financial assistance
to, or hold governance rights
over, any entity described in
clause (xix);
(II) is a United States
person;
(III) is beneficially owned
or controlled exclusively by 1
or more United States persons
that are United States citizens
or lawfully admitted for
permanent residence; and
(IV) derives at least a
majority of its funding or
revenue from 1 or more United
States persons that are United
States citizens or lawfully
admitted for permanent
residence;
(xxi) any entity that--
(I) employs more than 20
employees on a full-time basis
in the United States;
(II) filed in the previous
year Federal income tax returns
in the United States
demonstrating more than
$5,000,000 in gross receipts or
sales in the aggregate,
including the receipts or sales
of--
(aa) other entities
owned by the entity;
and
(bb) other entities
through which the
entity operates; and
(III) has an operating
presence at a physical office
within the United States;
(xxii) any corporation, limited
liability company, or other similar
entity of which the ownership interests
are owned or controlled, directly or
indirectly, by 1 or more entities
described in clause (i), (ii), (iii),
(iv), (v), (vii), (viii), (ix), (x),
(xi), (xii), (xiii), (xiv), (xv),
(xvi), (xvii) (xix), or (xxi);
(xxiii) any corporation, limited
liability company, or other similar
entity--
(I) in existence for over 1
year;
(II) that is not engaged in
active business;
(III) that is not owned,
directly or indirectly, by a
foreign person;
(IV) that has not, in the
preceding 12-month period,
experienced a change in
ownership or sent or received
funds in an amount greater than
$1,000 (including all funds
sent to or received from any
source through a financial
account or accounts in which
the entity, or an affiliate of
the entity, maintains an
interest); and
(V) that does not otherwise
hold any kind or type of
assets, including an ownership
interest in any corporation,
limited liability company, or
other similar entity;
(xxiv) any entity or class of
entities that the Secretary of the
Treasury, with the written concurrence
of the Attorney General and the
Secretary of Homeland Security, has, by
regulation, determined should be exempt
from the requirements of subsection (b)
because requiring beneficial foreign
ownership information from the entity
or class of entities--
(I) would not serve the
public interest; and
(II) would not be highly
useful in national security,
intelligence, and law
enforcement agency efforts to
detect, prevent, or prosecute
money laundering, the financing
of terrorism, proliferation
finance, serious tax fraud, or
other crimes.
(12) State.--The term ``State'' means any State of
the United States, the District of Columbia, the
Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, American Samoa, Guam, the
United States Virgin Islands, and any other
commonwealth, territory, or possession of the United
States.
(13) Unique identifying number.--The term ``unique
identifying number'' means, with respect to an
individual or an entity with a sole member, the unique
identifying number from an acceptable identification
document.
(14) United states person.--The term ``United States
person'' has the meaning given the term in section
7701(a) of the Internal Revenue Code of 1986.
(b) Beneficial Foreign Ownership Information Reporting.--
(1) Reporting.--
(A) In general.--In accordance with
regulations prescribed by the Secretary of the
Treasury, each reporting company shall submit
to FinCEN a report that contains the
information described in paragraph (2).
(B) Reporting of existing entities.--In
accordance with regulations prescribed by the
Secretary of the Treasury, any reporting
company that has been formed or registered
before the effective date of the regulations
prescribed under this subsection shall, in a
timely manner, and not later than 2 years after
the effective date of the regulations
prescribed under this subsection, submit to
FinCEN a report that contains the information
described in paragraph (2).
(C) Reporting at time of formation or
registration.--In accordance with regulations
prescribed by the Secretary of the Treasury,
any reporting company that has been formed or
registered after the effective date of the
regulations promulgated under this subsection
shall, at the time of formation or
registration, submit to FinCEN a report that
contains the information described in paragraph
(2).
(D) Updated reporting for changes in
beneficial foreign ownership.--In accordance
with regulations prescribed by the Secretary of
the Treasury, a reporting company shall, in a
timely manner, and not later than 1 year after
the date on which there is a change with
respect to any information described in
paragraph (2), submit to FinCEN a report that
updates the information relating to the change.
(E) Treasury review of updated reporting for
changes in beneficial foreign ownership.--The
Secretary of the Treasury, in consultation with
the Attorney General and the Secretary of
Homeland Security, shall conduct a review to
evaluate--
(i) the necessity of a requirement
for corporations, limited liability
companies, or other similar entities to
update the report on beneficial foreign
ownership information in paragraph (2),
related to a change in ownership,
within a shorter period of time than
required under subparagraph (D), taking
into account the updating requirements
under subparagraph (D) and the
information contained in the reports;
(ii) the benefit to law enforcement
and national security officials that
might be derived from, and the burden
that a requirement to update the list
of beneficial foreign owners within a
shorter period of time after a change
in the list of beneficial foreign
owners would impose on corporations,
limited liability companies, or other
similar entities; and
(iii) not later than 2 years after
the date of enactment of this section,
incorporate 2 into the
regulations, as appropriate, any
changes necessary to implement the
findings and determinations based on
the review required under this
subparagraph.
(F) Regulation requirements.--In promulgating
the regulations required under subparagraphs
(A) through (D), the Secretary of the Treasury
shall, to the greatest extent practicable--
(i) establish partnerships with
State, local, and Tribal governmental
agencies;
(ii) collect information described in
paragraph (2) through existing Federal,
State, and local processes and
procedures;
(iii) minimize burdens on reporting
companies associated with the
collection of the information described
in paragraph (2), in light of the
private compliance costs placed on
legitimate businesses, including by
identifying any steps taken to mitigate
the costs relating to compliance with
the collection of information; and
(iv) collect information described in
paragraph (2) in a form and manner that
ensures the information is highly
useful in--
(I) facilitating important
national security,
intelligence, and law
enforcement activities; and
(II) confirming beneficial
foreign ownership information
provided to financial
institutions to facilitate the
compliance of the financial
institutions with anti-money
laundering, countering the
financing of terrorism, and
customer due diligence
requirements under applicable
law.
(G) Regulatory simplification.--To simplify
compliance with this section for reporting
companies and financial institutions, the
Secretary of the Treasury shall ensure that the
regulations prescribed by the Secretary under
this subsection are added to part 1010 of title
31, Code of Federal Regulations, or any
successor thereto.
(2) Required information.--
(A) In general.--In accordance with
regulations prescribed by the Secretary of the
Treasury, a report delivered under paragraph
(1) shall, except as provided in subparagraph
(B), identify each beneficial foreign owner of
the applicable reporting company and each
applicant with respect to that reporting
company by--
(i) full legal name;
(ii) date of birth;
(iii) current, as of the date on
which the report is delivered,
residential or business street address;
and
(iv)(I) unique identifying number
from an acceptable identification
document; or
(II) FinCEN identifier in accordance
with requirements in paragraph (3).
(B) Reporting requirement for exempt entities
having an ownership interest.--If an exempt
entity described in subsection (a)(11)(B) has
or will have a direct or indirect ownership
interest in a reporting company, the reporting
company or the applicant--
(i) shall, with respect to the exempt
entity, only list the name of the
exempt entity; and
(ii) shall not be required to report
the information with respect to the
exempt entity otherwise required under
subparagraph (A).
(C) Reporting requirement for certain pooled
investment vehicles.--Any corporation, limited
liability company, or other similar entity that
is an exempt entity described in subsection
(a)(11)(B)(xviii) and is formed under the laws
of a foreign country shall file with FinCEN a
written certification that provides
identification information of an individual
that exercises substantial control over the
pooled investment vehicle in the same manner as
required under this subsection.
(D) Reporting requirement for exempt
subsidiaries.--In accordance with the
regulations promulgated by the Secretary, any
corporation, limited liability company, or
other similar entity that is an exempt entity
described in subsection (a)(11)(B)(xxii),
shall, at the time such entity no longer meets
the criteria described in subsection
(a)(11)(B)(xxii), submit to FinCEN a report
containing the information required under
subparagraph (A).
(E) Reporting requirement for exempt
grandfathered entities.--In accordance with the
regulations promulgated by the Secretary, any
corporation, limited liability company, or
other similar entity that is an exempt entity
described in subsection (a)(11)(B)(xxiii),
shall, at the time such entity no longer meets
the criteria described in subsection
(a)(11)(B)(xxiii), submit to FinCEN a report
containing the information required under
subparagraph (A).
(3) FinCEN identifier.--
(A) Issuance of fincen identifier.--
(i) In general.--Upon request by an
individual who has provided FinCEN with
the information described in paragraph
(2)(A) pertaining to the individual, or
by an entity that has reported its
beneficial foreign ownership
information to FinCEN in accordance
with this section, FinCEN shall issue a
FinCEN identifier to such individual or
entity.
(ii) Updating of information.--An
individual or entity with a FinCEN
identifier shall submit filings with
FinCEN pursuant to paragraph (1)
updating any information described in
paragraph (2) in a timely manner
consistent with paragraph (1)(D).
(iii) Exclusive identifier.--FinCEN
shall not issue more than 1 FinCEN
identifier to the same individual or to
the same entity (including any
successor entity).
(B) Use of fincen identifier for
individuals.--Any person required to report the
information described in paragraph (2) with
respect to an individual may instead report the
FinCEN identifier of the individual.
(C) Use of fincen identifier for entities.--
If an individual is or may be a beneficial
foreign owner of a reporting company by an
interest held by the individual in an entity
that, directly or indirectly, holds an interest
in the reporting company, the reporting company
may report the FinCEN identifier of the entity
in lieu of providing the information required
by paragraph (2)(A) with respect to the
individual.
(4) Regulations.--The Secretary of the Treasury
shall--
(A) by regulation prescribe procedures and
standards governing any report under paragraph
(2) and any FinCEN identifier under paragraph
(3); and
(B) in promulgating the regulations under
subparagraph (A) to the extent practicable,
consistent with the purposes of this section--
(i) minimize burdens on reporting
companies associated with the
collection of beneficial foreign
ownership information, including by
eliminating duplicative requirements;
and
(ii) ensure the beneficial foreign
ownership information reported to
FinCEN is accurate, complete, and
highly useful.
(5) Effective date.--The requirements of this
subsection shall take effect on the effective date of
the regulations prescribed by the Secretary of the
Treasury under this subsection, which shall be
promulgated not later than 1 year after the date of
enactment of this section.
(6) Report.--Not later than 1 year after the
effective date described in paragraph (5), and annually
thereafter for 2 years, the Secretary of the Treasury
shall submit to Congress a report describing the
procedures and standards prescribed to carry out
paragraph (2), which shall include an assessment of--
(A) the effectiveness of those procedures and
standards in minimizing reporting burdens
(including through the elimination of
duplicative requirements) and strengthening the
accuracy of reports submitted under paragraph
(2); and
(B) any alternative procedures and standards
prescribed to carry out paragraph (2).
(c) Retention and Disclosure of Beneficial Foreign Ownership
Information by FinCEN.--
(1) Retention of information.--Beneficial foreign
ownership information required under subsection (b)
relating to each reporting company shall be maintained
by FinCEN for not fewer than 5 years after the date on
which the reporting company terminates.
(2) Disclosure.--
(A) Prohibition.--Except as authorized by
this subsection and the protocols promulgated
under this subsection, beneficial foreign
ownership information reported under this
section shall be confidential and may not be
disclosed by--
(i) an officer or employee of the
United States;
(ii) an officer or employee of any
State, local, or Tribal agency; or
(iii) an officer or employee of any
financial institution or regulatory
agency receiving information under this
subsection.
(B) Scope of disclosure by fincen.--FinCEN
may disclose beneficial foreign ownership
information reported pursuant to this section
only upon receipt of--
(i) a request, through appropriate
protocols--
(I) from a Federal agency
engaged in national security,
intelligence, or law
enforcement activity, for use
in furtherance of such
activity; or
(II) from a State, local, or
Tribal law enforcement agency,
if a court of competent
jurisdiction, including any
officer of such a court, has
authorized the law enforcement
agency to seek the information
in a criminal or civil
investigation;
(ii) a request from a Federal agency
on behalf of a law enforcement agency,
prosecutor, or judge of another
country, including a foreign central
authority or competent authority (or
like designation), under an
international treaty, agreement,
convention, or official request made by
law enforcement, judicial, or
prosecutorial authorities in trusted
foreign countries when no treaty,
agreement, or convention is available--
(I) issued in response to a
request for assistance in an
investigation or prosecution by
such foreign country; and
(II) that--
(aa) requires
compliance with the
disclosure and use
provisions of the
treaty, agreement, or
convention, publicly
disclosing any
beneficial foreign
ownership information
received; or
(bb) limits the use
of the information for
any purpose other than
the authorized
investigation or
national security or
intelligence activity;
(iii) a request made by a financial
institution subject to customer due
diligence requirements, with the
consent of the reporting company, to
facilitate the compliance of the
financial institution with customer due
diligence requirements under applicable
law; or
(iv) a request made by a Federal
functional regulator or other
appropriate regulatory agency
consistent with the requirements of
subparagraph (C).
(C) Form and manner of disclosure to
financial institutions and regulatory
agencies.--The Secretary of the Treasury shall,
by regulation, prescribe the form and manner in
which information shall be provided to a
financial institution under subparagraph
(B)(iii), which regulation shall include that
the information shall also be available to a
Federal functional regulator or other
appropriate regulatory agency, as determined by
the Secretary, if the agency--
(i) is authorized by law to assess,
supervise, enforce, or otherwise
determine the compliance of the
financial institution with the
requirements described in that
subparagraph;
(ii) uses the information solely for
the purpose of conducting the
assessment, supervision, or authorized
investigation or activity described in
clause (i); and
(iii) enters into an agreement with
the Secretary providing for appropriate
protocols governing the safekeeping of
the information.
(3) Appropriate protocols.--The Secretary of the
Treasury shall establish by regulation protocols
described in paragraph (2)(A) that--
(A) protect the security and confidentiality
of any beneficial foreign ownership information
provided directly by the Secretary;
(B) require the head of any requesting
agency, on a non-delegable basis, to approve
the standards and procedures utilized by the
requesting agency and certify to the Secretary
semi-annually that such standards and
procedures are in compliance with the
requirements of this paragraph;
(C) require the requesting agency to
establish and maintain, to the satisfaction of
the Secretary, a secure system in which such
beneficial foreign ownership information
provided directly by the Secretary shall be
stored;
(D) require the requesting agency to furnish
a report to the Secretary, at such time and
containing such information as the Secretary
may prescribe, that describes the procedures
established and utilized by such agency to
ensure the confidentiality of the beneficial
foreign ownership information provided directly
by the Secretary;
(E) require a written certification for each
authorized investigation or other activity
described in paragraph (2) from the head of an
agency described in paragraph (2)(B)(i)(I), or
their designees, that--
(i) states that applicable
requirements have been met, in such
form and manner as the Secretary may
prescribe; and
(ii) at a minimum, sets forth the
specific reason or reasons why the
beneficial foreign ownership
information is relevant to an
authorized investigation or other
activity described in paragraph (2);
(F) require the requesting agency to limit,
to the greatest extent practicable, the scope
of information sought, consistent with the
purposes for seeking beneficial foreign
ownership information;
(G) restrict, to the satisfaction of the
Secretary, access to beneficial foreign
ownership information to whom disclosure may be
made under the provisions of this section to
only users at the requesting agency--
(i) who are directly engaged in the
authorized investigation or activity
described in paragraph (2);
(ii) whose duties or responsibilities
require such access;
(iii) who--
(I) have undergone
appropriate training; or
(II) use staff to access the
database who have undergone
appropriate training;
(iv) who use appropriate identity
verification mechanisms to obtain
access to the information; and
(v) who are authorized by agreement
with the Secretary to access the
information;
(H) require the requesting agency to
establish and maintain, to the satisfaction of
the Secretary, a permanent system of
standardized records with respect to an
auditable trail of each request for beneficial
foreign ownership information submitted to the
Secretary by the agency, including the reason
for the request, the name of the individual who
made the request, the date of the request, any
disclosure of beneficial foreign ownership
information made by or to the agency, and any
other information the Secretary of the Treasury
determines is appropriate;
(I) require that the requesting agency
receiving beneficial foreign ownership
information from the Secretary conduct an
annual audit to verify that the beneficial
foreign ownership information received from the
Secretary has been accessed and used
appropriately, and in a manner consistent with
this paragraph and provide the results of that
audit to the Secretary upon request;
(J) require the Secretary to conduct an
annual audit of the adherence of the agencies
to the protocols established under this
paragraph to ensure that agencies are
requesting and using beneficial foreign
ownership information appropriately; and
(K) provide such other safeguards which the
Secretary determines (and which the Secretary
prescribes in regulations) to be necessary or
appropriate to protect the confidentiality of
the beneficial foreign ownership information.
(4) Violation of protocols.--Any employee or officer
of a requesting agency under paragraph (2)(B) that
violates the protocols described in paragraph (3),
including unauthorized disclosure or use, shall be
subject to criminal and civil penalties under
subsection (h)(3)(B).
(5) Department of the treasury access.--
(A) In general.--Beneficial foreign ownership
information shall be accessible for inspection
or disclosure to officers and employees of the
Department of the Treasury whose official
duties require such inspection or disclosure
subject to procedures and safeguards prescribed
by the Secretary of the Treasury.
(B) Tax administration purposes.--Officers
and employees of the Department of the Treasury
may obtain access to beneficial foreign
ownership information for tax administration
purposes in accordance with this subsection.
(6) Rejection of request.--The Secretary of the
Treasury--
(A) shall reject a request not submitted in
the form and manner prescribed by the Secretary
under paragraph (2)(C); and
(B) may decline to provide information
requested under this subsection upon finding
that--
(i) the requesting agency has failed
to meet any other requirement of this
subsection;
(ii) the information is being
requested for an unlawful purpose; or
(iii) other good cause exists to deny
the request.
(7) Suspension.--The Secretary of the Treasury may
suspend or debar a requesting agency from access for
any of the grounds set forth in paragraph (6),
including for repeated or serious violations of any
requirement under paragraph (2).
(8) Security protections.--The Secretary of the
Treasury shall maintain information security
protections, including encryption, for information
reported to FinCEN under subsection (b) and ensure that
the protections--
(A) are consistent with standards and
guidelines developed under subchapter II of
chapter 35 of title 44; and
(B) incorporate Federal information system
security controls for high-impact systems,
excluding national security systems, consistent
with applicable law to prevent the loss of
confidentiality, integrity, or availability of
information that may have a severe or
catastrophic adverse effect.
(9) Report by the secretary.--Not later than 1 year
after the effective date of the regulations prescribed
under this subsection, and annually thereafter for 5
years, the Secretary of the Treasury shall submit to
the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Financial Services of
the House of Representatives a report, which--
(A) may include a classified annex; and
(B) shall, with respect to each request
submitted under paragraph (2)(B)(i)(II) during
the period covered by the report, and
consistent with protocols established by the
Secretary that are necessary to protect law
enforcement sensitive, tax-related, or
classified information, include--
(i) the date on which the request was
submitted;
(ii) the source of the request;
(iii) whether the request was
accepted or rejected or is pending; and
(iv) a general description of the
basis for rejecting the such request,
if applicable.
(10) Audit by the comptroller general.--Not later
than 1 year after the effective date of the regulations
prescribed under this subsection, and annually
thereafter for 6 years, the Comptroller General of the
United States shall--
(A) audit the procedures and safeguards
established by the Secretary of the Treasury
under those regulations, including duties for
verification of requesting agencies systems and
adherence to the protocols established under
this subsection, to determine whether such
safeguards and procedures meet the requirements
of this subsection and that the Department of
the Treasury is using beneficial foreign
ownership information appropriately in a manner
consistent with this subsection; and
(B) submit to the Secretary of the Treasury,
the Committee on Banking, Housing, and Urban
Affairs of the Senate, and the Committee on
Financial Services of the House of
Representatives a report that contains the
findings and determinations with respect to any
audit conducted under this paragraph.
(11) Department of the treasury testimony.--
(A) In general.--Not later than March 31 of
each year for 5 years beginning in 2022, the
Director shall be made available to testify
before the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee
on Financial Services of the House of
Representatives, or an appropriate subcommittee
thereof, regarding FinCEN issues, including,
specifically, issues relating to--
(i) anticipated plans, goals, and
resources necessary for operations of
FinCEN in implementing the requirements
of the Anti-Money Laundering Act of
2020 and the amendments made by that
Act;
(ii) the adequacy of appropriations
for FinCEN in the current and the
previous fiscal year to--
(I) ensure that the
requirements and obligations
imposed upon FinCEN by the
Anti-Money Laundering Act of
2020 and the amendments made by
that Act are completed as
efficiently, effectively, and
expeditiously as possible; and
(II) provide for robust and
effective implementation and
enforcement of the provisions
of the Anti-Money Laundering
Act of 2020 and the amendments
made by that Act;
(iii) strengthen 2 FinCEN
management efforts, as necessary and as
identified by the Director, to meet the
requirements of the Anti-Money
Laundering Act of 2020 and the
amendments made by that Act;
(iv) provide 2 for the
necessary public outreach to ensure the
broad dissemination of information
regarding any new program requirements
provided for in the Anti-Money
Laundering Act of 2020 and the
amendments made by that Act,
including--
(I) educating the business
community on the goals and
operations of the new
beneficial foreign ownership
database; and
(II) disseminating to the
governments of countries that
are allies or partners of the
United States information on
best practices developed by
FinCEN related to beneficial
foreign ownership information
retention and use;
(v) any policy recommendations that
could facilitate and improve
communication and coordination between
the private sector, FinCEN, and the
Federal, State, and local agencies and
entities involved in implementing
innovative approaches to meet their
obligations under the Anti-Money
Laundering Act of 2020 and the
amendments made by that Act, the Bank
Secrecy Act (as defined in section 6003
of the Anti-Money Laundering Act of
2020), and other anti-money laundering
compliance laws; and
(vi) any other matter that the
Director determines is appropriate.
(B) Testimony classification.--The testimony
required under subparagraph (A)--
(i) shall be submitted in
unclassified form; and
(ii) may include a classified
portion.
(d) Agency Coordination.--
(1) In general.--The Secretary of the Treasury shall,
to the greatest extent practicable, update the
information described in subsection (b) by working
collaboratively with other relevant Federal, State, and
Tribal agencies.
(2) Information from relevant federal, state, and
tribal agencies.--Relevant Federal, State, and Tribal
agencies, as determined by the Secretary of the
Treasury, shall, to the extent practicable, and
consistent with applicable legal protections, cooperate
with and provide information requested by FinCEN for
purposes of maintaining an accurate, complete, and
highly useful database for beneficial foreign ownership
information.
(3) Regulations.--The Secretary of the Treasury, in
consultation with the heads of other relevant Federal
agencies, may promulgate regulations as necessary to
carry out this subsection.
(e) Notification of Federal Obligations.--
(1) Federal.--The Secretary of the Treasury shall
take reasonable steps to provide notice to persons of
their obligations to report beneficial foreign
ownership information under this section, including by
causing appropriate informational materials describing
such obligations to be included in 1 or more forms or
other informational materials regularly distributed by
the Internal Revenue Service and FinCEN.
(2) States and indian tribes.--
(A) In general.--As a condition of the funds
made available under this section, each State
and Indian Tribe shall, not later than 2 years
after the effective date of the regulations
promulgated under subsection (b)(4), take the
following actions:
(i) The secretary of a State or a
similar office in each State or Indian
Tribe responsible for the formation or
registration of entities created by the
filing of a public document with the
office under the law of the State or
Indian Tribe shall periodically,
including at the time of any initial
formation or registration of an entity,
assessment of an annual fee, or renewal
of any license to do business in the
United States and in connection with
State or Indian Tribe corporate tax
assessments or renewals--
(I) notify filers of their
requirements as reporting
companies under this section,
including the requirements to
file and update reports under
paragraphs (1) and (2) of
subsection (b); and
(II) provide the filers with
a copy of the reporting company
form created by the Secretary
of the Treasury under this
subsection or an internet link
to that form.
(ii) The secretary of a State or a
similar office in each State or Indian
Tribe responsible for the formation or
registration of entities created by the
filing of a public document with the
office under the law of the State or
Indian Tribes shall update the
websites, forms relating to
incorporation, and physical premises of
the office to notify filers of their
requirements as reporting companies
under this section, including providing
an internet link to the reporting
company form created by the Secretary
of the Treasury under this section.
(B) Notification from the department of the
treasury.--A notification under clause (i) or
(ii) of subparagraph (A) shall explicitly state
that the notification is on behalf of the
Department of the Treasury for the purpose of
preventing money laundering, the financing of
terrorism, proliferation financing, serious tax
fraud, and other financial crime by requiring
nonpublic registration of business entities
formed or registered to do business in the
United States.
(f) No Bearer Share Corporations or Limited Liability
Companies.--A corporation, limited liability company, or other
similar entity formed under the laws of a State or Indian Tribe
may not issue a certificate in bearer form evidencing either a
whole or fractional interest in the entity.
(g) Regulations.--In promulgating regulations carrying out
this section, the Director shall reach out to members of the
small business community and other appropriate parties to
ensure efficiency and effectiveness of the process for the
entities subject to the requirements of this section.
(h) Penalties.--
(1) Reporting violations.--It shall be unlawful for
any person to--
(A) willfully provide, or attempt to provide,
false or fraudulent beneficial foreign
ownership information, including a false or
fraudulent identifying photograph or document,
to FinCEN in accordance with subsection (b); or
(B) willfully fail to report complete or
updated beneficial foreign ownership
information to FinCEN in accordance with
subsection (b).
(2) Unauthorized disclosure or use.--Except as
authorized by this section, it shall be unlawful for
any person to knowingly disclose or knowingly use the
beneficial foreign ownership information obtained by
the person through--
(A) a report submitted to FinCEN under
subsection (b); or
(B) a disclosure made by FinCEN under
subsection (c).
(3) Criminal and civil penalties.--
(A) Reporting violations.--Any person that
violates subparagraph (A) or (B) of paragraph
(1)--
(i) shall be liable to the United
States for a civil penalty of not more
than $500 for each day that the
violation continues or has not been
remedied; and
(ii) may be fined not more than
$10,000, imprisoned for not more than 2
years, or both.
(B) Unauthorized disclosure or use
violations.--Any person that violates paragraph
(2)--
(i) shall be liable to the United
States for a civil penalty of not more
than $500 for each day that the
violation continues or has not been
remedied; and
(ii)(I) shall be fined not more than
$250,000, or imprisoned for not more
than 5 years, or both; or
(II) while violating another law of
the United States or as part of a
pattern of any illegal activity
involving more than $100,000 in a 12-
month period, shall be fined not more
than $500,000, imprisoned for not more
than 10 years, or both.
(C) Safe harbor.--
(i) Safe harbor.--
(I) In general.--Except as
provided in subclause (II), a
person shall not be subject to
civil or criminal penalty under
subparagraph (A) if the
person--
(aa) has reason to
believe that any report
submitted by the person
in accordance with
subsection (b) contains
inaccurate information;
and
(bb) in accordance
with regulations issued
by the Secretary,
voluntarily and
promptly, and in no
case later than 90 days
after the date on which
the person submitted
the report, submits a
report containing
corrected information.
(II) Exceptions.--A person
shall not be exempt from
penalty under clause (i) if, at
the time the person submits the
report required by subsection
(b), the person--
(aa) acts for the
purpose of evading the
reporting requirements
under subsection (b);
and
(bb) has actual
knowledge that any
information contained
in the report is
inaccurate.
(ii) Assistance.--FinCEN shall
provide assistance to any person
seeking to submit a corrected report in
accordance with clause (i)(I).
(4) User complaint process.--
(A) In general.--The Inspector General of the
Department of the Treasury, in coordination
with the Secretary of the Treasury, shall
provide public contact information to receive
external comments or complaints regarding the
beneficial foreign ownership information
notification and collection process or
regarding the accuracy, completeness, or
timeliness of such information.
(B) Report.--The Inspector General of the
Department of the Treasury shall submit to
Congress a periodic report that--
(i) summarizes external comments or
complaints and related investigations
conducted by the Inspector General
related to the collection of beneficial
foreign ownership information; and
(ii) includes recommendations, in
coordination with FinCEN, to improve
the form and manner of the
notification, collection and updating
processes of the beneficial foreign
ownership information reporting
requirements to ensure the beneficial
foreign ownership information reported
to FinCEN is accurate, complete, and
highly useful.
(5) Treasury office of inspector general
investigation in the event of a cybersecurity breach.--
(A) In general.--In the event of a
cybersecurity breach that results in
substantial unauthorized access and disclosure
of sensitive beneficial foreign ownership
information, the Inspector General of the
Department of the Treasury shall conduct an
investigation into FinCEN cybersecurity
practices that, to the extent possible,
determines any vulnerabilities within FinCEN
information security and confidentiality
protocols and provides recommendations for
fixing those deficiencies.
(B) Report.--The Inspector General of the
Department of the Treasury shall submit to the
Secretary of the Treasury a report on each
investigation conducted under subparagraph (A).
(C) Actions of the secretary.--Upon receiving
a report submitted under subparagraph (B), the
Secretary of the Treasury shall--
(i) determine whether the Director
had any responsibility for the
cybersecurity breach or whether
policies, practices, or procedures
implemented at the direction of the
Director led to the cybersecurity
breach; and
(ii) submit to Congress a written
report outlining the findings of the
Secretary, including a determination by
the Secretary on whether to retain or
dismiss the individual serving as the
Director.
(6) Definition.--In this subsection, the term
``willfully'' means the voluntary, intentional
violation of a known legal duty.
(i) Continuous Review of Exempt Entities.--
(1) In general.--On and after the effective date of
the regulations promulgated under subsection (b)(4), if
the Secretary of the Treasury makes a determination,
which may be based on information contained in the
report required under section 6502(c) of the Anti-Money
Laundering Act of 2020 or on any other information
available to the Secretary, that an entity or class of
entities described in subsection (a)(11)(B) has been
involved in significant abuse relating to money
laundering, the financing of terrorism, proliferation
finance, serious tax fraud, or any other financial
crime, not later than 90 days after the date on which
the Secretary makes the determination, the Secretary
shall submit to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives a
report that explains the reasons for the determination
and any administrative or legislative recommendations
to prevent such abuse.
(2) Classified annex.--The report required by
paragraph (1)--
(A) shall be submitted in unclassified form;
and
(B) may include a classified annex.
(j) Authorization of Appropriations.--There are authorized to
be appropriated to FinCEN for each of the 3 fiscal years
beginning on the effective date of the regulations promulgated
under subsection (b)(4), such sums as may be necessary to carry
out this section, including allocating funds to the States to
pay reasonable costs relating to compliance with the
requirements of such section.
* * * * * * *
MINORITY VIEWS
H.R. 425 would eliminate most of the Corporate Transparency
Act of 2020 (CTA), preventing the implementation of an
essential crime-fighting program designed to make it easier for
law enforcement and others to identify bad actors and their
illicit funds. By codifying the Trump Administration's gutting
of the rules that implement this law, the bill facilitates the
abuse of anonymous shell companies,33}34 a structure
commonly used by drug cartels, human traffickers, terrorists,
fraudsters/scammers, oligarchs, and other bad actors to gain
access to the U.S. financial system.
---------------------------------------------------------------------------
\33\China Daily, China has no need to weaken yuan for trade edge,
says PBOC governor (Mar. 6, 2026).
\34\FACT Coalition, Anonymous Companies Help Finance Illicit
Commerce and Harm American Businesses and Citizens (May 2019).
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Promoting transparency around beneficial ownership--meaning
the often-hidden, but true, ownership or control of a company,
the CTA establishes national requirements and a database at
Treasury's Financial Crimes Enforcement Network (FinCEN) to
collect the beneficial ownership information (BOI) of certain
companies that are of the type, size, and function typically
seen in such shell companies. The law also provides essential,
streamlined access to this information for qualifying law
enforcement, national security, and regulatory bodies, such as
the Department of Justice, the Office of Foreign Assets Control
(OFAC) and the Committee on Foreign Investment in the United
States (CFIUS).\35\ Its passage was supported by a broad,
bipartisan coalition that included businesses, financial
institutions, anti-corruption organizations, religious groups,
law enforcement, state governments,\36\ and even the first
Trump White House.\37\
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\35\FBI, S. D'Antuono, Combating Illicit Financing by Anonymous
Shell Companies, Statement for the Record (May 21, 2019).
\36\Freedom House. Diverse Coalition Supports Including the
Corporate Transparency Act in the 2021 NDAA (Oct. 7, 2020).
\37\White House, Statement of Administration Policy (Oct. 22,
2019).
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Prior to its passage, there was no federal requirement for
disclosure of the natural persons who own or control,
indirectly or directly, corporate entities, such as limited
liability corporations (LLCs).\38\ No state collected this
information either, meaning that in an investigation, there was
often no identifiable or legally responsible individual
attached to these firms (and thus no one to whom a court order
could be served). This lack of transparency has long hampered
the ability of investigators and other U.S. government
authorities to effectively ``follow the money'' and pursue bad
actors who are hiding or laundering the proceeds of their
crimes using the anonymity that shell companies provide.\39\
These ``shells,'' so-called because they look like a company on
the outside but lack the inner characteristics that define
legitimate businesses (such as employees or revenues), are
notorious for their illicit uses:
---------------------------------------------------------------------------
\38\Congressional Research Service, Beneficial Ownership
Transparency in Corporate Formation, Shell Companies, Real Estate, and
Financial Transactions (Jul. 8, 2019) (CRS-R45798).
\39\Ibid.
---------------------------------------------------------------------------
Money laundering, where the shell companies
are used to disguise the origins of illicit funds,
including the proceeds of crime;
Tax evasion, where shell companies in low-
tax or tax-haven jurisdictions (including U.S. states,
as well as nations) enable individuals, corporations,
and cartels to avoid paying their fair share of taxes,
reducing government revenues and entrenching economic
inequality;\40\
---------------------------------------------------------------------------
\40\See The Panama Papers (2016) and The Paradise Papers (2017),
both from the International Consortium of Investigative Journalists.
---------------------------------------------------------------------------
Terrorist financing, where anonymous shell
companies can conceal the identity of terrorist
individuals or organizations so they can exploit the
financial system to raise funds, sustain operations,
and initiate attacks;
Corruption and bribery, where shell
companies are used by kleptocrats and collaborators to
veil the payment and receipt of bribes and other
corrupt activities; and
Distorted market competition, where
anonymous shell companies can manipulate prices, gain
advantage in bidding processes, move counterfeit or
mislabeled goods, and other unfair commercial
distortions, including those that harm small
businesses.\41\
---------------------------------------------------------------------------
\41\FACT Coalition, Small Businesses Support the Corporate
Transparency Act (Updated Apr. 2026).
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FinCEN had completed the technical build of the BOI
database and had issued most of the rulemakings required to
execute the law. Half of the anticipated filings had already
occurred.\42\ Yet in March 2025, the Trump Administration
announced that it would intentionally misinterpret the law to
allow it to exempt all U.S. citizens, domestic reporting
companies, and U.S. beneficial owners--going from an estimated
32 million entities to under 12,000--effectively eliminating
the very class of companies and beneficial owners that the law
was designed to cover.\43\ Further, Treasury proceeded to
narrow the scope of the rule to foreign companies and
beneficial owners alone.\44\ This action created significant
risks to national security and the integrity of the U.S.
financial system,\45\ while paving the way for President Trump
and his insiders to facilitate financial crime and further harm
the integrity of the U.S. financial system.\46\
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\42\See FSGG FY2026 Appropriations Bill Committee Report, (Aug. 1,
2025).
\43\ICIJ, S. Ellefson, Treasury Department won't enforce beneficial
ownership rule under the Corporate Transparency Act (Mar. 5, 2025).
\44\Treasury, Treasury Department Announces Suspension of
Enforcement of Corporate Transparency Act Against U.S. Citizens and
Domestic Reporting Companies (Mar. 2, 2025).
\45\FDD, E. Dezenski, J. Birenbaum, Keep the Door Closed to
Anonymous Shell Companies (May 27, 2025).
\46\The FACT Coalition, Treasury Reopens the Floodgates to Dirty
Money in the U.S. (Mar. 3, 2025).
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H.R. 425 codifies President Trump's distorted execution of
the law, undermining clear Congressional intent. It ignores
decades of evidence about the abuse of anonymous shell
companies--registered in the U.S., which have been discussed in
numerous Congressional hearings and reports.\47\ Treasury
itself has stressed the role of shell companies in successive
money laundering risk assessments, corruption risk assessments,
and many other publications.\48\ Further, as the National
Association of District Attorneys offered, in its response to
the revised Trump rulemaking that this bill aims to codify,
``Weakening or narrowing the CTA will have devastating
consequences for law enforcement's ability to fight criminal
enterprises that exploit shell companies to launder money,
traffic drugs and weapons, and fund human trafficking and
terrorism . . . without this data, prosecutors are left blind
when investigating shell companies . . . The proposed rule
change as currently drafted would greatly curtail our ability
to combat shell companies fueling illegal operations plaguing
communities across our country and would jeopardize public
safety and our nation's security.''\49\ This was echoed by the
National Narcotics Officers' Associations' Coalition, which
said in its comment letter that, ``Officers on the ground know
firsthand how difficult it is to build a financial case when
the true owners of a company are hidden behind layers of
paperwork and front people. The CTA was a long-overdue step
forward--giving investigators access to basic, essential
information that can make or break a case. Most legitimate
businesses already operate with transparency and comply with
existing legal requirements. These reporting provisions are
designed to target bad actors--not law-abiding companies. It is
the criminal enterprises--drug traffickers, money launderers,
and their financial enablers--who stand to gain if this law is
weakened.''\50\
---------------------------------------------------------------------------
\47\For example, Senate PSI, ``U.S. Tax Shelter Industry: The Role
of Accountants, Lawyers, and Financial Professionals'' (Nov. 2003);
Senate HSGAC, ``Failure to Identify Company Owners Impedes Law
Enforcement'' (Nov. 2006); House HFSC, ``March 2019--``Promoting
Corporate Transparency: Examining Legislative Proposals to Detect and
Deter Financial Crime'' (Mar. 2019).
\48\For example, Treasury, Treasury Publishes 2024 National Risk
Assessments for Money Laundering, Terrorist Financing, and
Proliferation Financing (Feb. 7, 2024).
\49\NDAA, Re: Comments on Suspension of Enforcement and Proposed
Rule Changes to the Corporate (Mar. 26, 2025).
\50\NNOAC, Re: Comments on Suspension of Enforcement and Proposed
Rule Changes to the Corporate Transparency Act (May 27, 2025).
---------------------------------------------------------------------------
The majority's arguments that these benefits do not justify
the burdens placed on the reporting companies are specious. The
one group that had tried to stop the law's passage and which
has driven this repeal effort is the National Federation of
Independent Business (NFIB), which has vastly overinflated
projected time and costs of filing: Most U.S. small businesses
are non-employer firms (approximately 82%), meaning that they
should have no trouble understanding who owns them.\51\ A
member poll by another business organization, Small Business
Majority, found that 78% of the small businesses that had filed
with FinCEN had found the filing easy; only 6% said it was very
difficult.\52\
---------------------------------------------------------------------------
\51\SBA, 2025 Small Business Profile (Accessed Apr. 19, 2026).
\52\Small Business Majority, Small business owners share their
experiences with new Beneficial Ownership Information reporting
requirements (Feb. 15, 2024).
---------------------------------------------------------------------------
The majority also says the CTA ``criminalizes paperwork,''
falsely claiming that an unsuspecting or unsophisticated
business owners might be arrested and fined for making filing
mistakes. This is a deliberate misinterpretation of the law
which states explicitly that penalties will come solely for
those that attempt to deceive government authorities. The law
states, ``(A) willfully provide, or attempt to provide, false
or fraudulent beneficial ownership information, including a
false or fraudulent identifying photograph or document, to
FinCEN in accordance with subsection (b); or (B) willfully fail
to report complete or updated beneficial ownership information
to FinCEN in accordance with subsection (b).''\53\
---------------------------------------------------------------------------
\53\31 U.S. Code Sec. 5336--Beneficial ownership information
reporting requirements: (h) penalties.
---------------------------------------------------------------------------
This bill, supported by 193 GOP cosponsors (and zero
Democrats), would make the U.S. the only major economy (of 170
nations) to not have, or be working to initiate, a BOI
registry.\54\ It would endanger the U.S. status with the
Financial Action Task Force (FATF), the global standards-
setting body, which is currently completing its periodic
assessment of America's measures to combat money laundering and
terrorist financing;\55\ previous evaluations highlighted the
deficiencies in the U.S. system related to the lack of
beneficial ownership transparency.\56\ Finally, it lays bare
the duplicitous hypocrisy of the Trump Administration and the
Trump GOP as they decry ``benefits fraud,'' ``terrorism,''
``Iran's proliferation,'' ``Mexican drug cartels,'' ``Chinese
money laundering networks,'' etc., while they press to
eliminate one of America's most important tools to fight money
laundering, terror finance, and other financial crimes.
---------------------------------------------------------------------------
\54\Open Ownership, Open Ownership map: Worldwide action on
beneficial ownership transparency (Accessed Apr. 13, 2026).
\55\Just Security, A. Subramanian-Montgomery, S. Gardiner, The
Financial Action Task Force: An Accountability Mechanism for the United
States (Mar. 31, 2026).
\56\FATF, Third Mutual Evaluation Report on Anti-Money Laundering
and Combating The Financing Of Terrorism: United States Of America
(2006).
---------------------------------------------------------------------------
Sampling of groups and experts that oppose the gutting of
the law, via the Trump rulemaking and/or H.R. 425:\57\
Transparency International--U.S. Office; the Financial
Accountability and Corporate Transparency (FACT) Coalition;
Public Citizen; Americans for Financial Reform; Democracy
Defenders; National District Attorneys Association; Major
Cities Chiefs Association; National Narcotic Officers'
Associations' Coalition (NNOAC); Polaris (nation's leading
anti-human trafficking organization); Modern Fortis; Foundation
for Defense of Democracies (FDD); Main Street Alliance (MSA);
Citizens for Responsibility and Ethics in Washington (CREW);
Jubilee USA; Open Ownership; The Tax Law Center at New York
University Law; Foreign Policy for America; American Israel
Public Affairs Committee (AIPAC); Sembrando Sentido; The Quincy
Institute for Responsible Statecraft; the United Brotherhood of
Carpenters and Joiners of America (UBC); Common Cause; and
International Coalition Against Illicit Economies (ICAIE),
national security and anti-corruption experts including, Debra
LePrevotte, Richard Nephew, John Cassara, Nate Sibley, and
Albert Torres. Further, polling by the firm, McLaughlin and
Associates, details widespread public support for the CTA, with
81% of respondents agreeing with the statement that ``Asking
some small businesses to do 20 minutes of paperwork identifying
their true owner is a small price to pay for keeping our
communities safe from drug trafficking, terrorist financing,
and other financial crimes.''\58\
---------------------------------------------------------------------------
\57\Among the lists available: FACT Coalition, Endorsements for
Beneficial Ownership Transparency (Oct. 19, 2020).
\58\McLaughlin and Associates, McLaughlin and Associates Poll Shows
Overwhelming Support For Corporate Transparency Act (Oct. 9, 2024).
---------------------------------------------------------------------------
For these reasons, we oppose H.R. 425.
Sincerely,
Maxine Waters,
Ranking Member.
Nydia M. Velazquez,
Brad Sherman,
Stephen F. Lynch,
Al Green,
Emanuel Cleaver, II,
Bill Foster,
Joyce Beatty,
Rashida Tlaib,
Sylvia R. Garcia,
Cleo Fields,
Members of Congress.
[all]