The Treasury Department on Tuesday officially repealed a requirement for American companies and individuals to report beneficial ownership information to its Financial Crimes Enforcement Network, or FinCEN. The department initially proposed the repeal in March 2025 and published the final rule in the Federal Register on Tuesday.
The original reporting requirement was part of an effort to increase corporate transparency and combat money laundering, shell companies, and other financial crimes. Under the Biden-era rule, businesses were required to disclose information about individuals who own or control at least 25 percent of a company or who exercise substantial control over it.
What the Right Is Saying
Business groups and Republican lawmakers have praised the repeal as a relief from regulatory burden on small businesses. The U.S. Chamber of Commerce had previously argued that the reporting requirement imposed significant compliance costs, particularly on smaller companies with complex ownership structures.
Senator Tim Scott of South Carolina said the rule was "overly broad" and placed an unfair burden on legitimate businesses trying to comply with federal regulations. Conservative critics have also raised privacy concerns, arguing that requiring individuals to disclose their personal financial stakes could expose business owners to risks including identity theft and harassment.
The Treasury Department stated that the repeal is intended to reduce compliance costs for American businesses while maintaining appropriate safeguards against financial crime through other existing reporting mechanisms.
What the Left Is Saying
Democratic lawmakers and anti-corruption advocates have criticized the repeal as a step backward in the fight against financial crime. Representative Jim Himes of Connecticut, the ranking Democrat on the House Oversight Committee, said the move "protects bad actors and makes it harder for law enforcement to track illicit money."
The Financial Accountability and Corporate Transparency Coalition argued that beneficial ownership reporting is a "critical tool" for investigators. The organization stated that without this information, banks, law enforcement, and regulators lose visibility into who actually owns and controls companies.
Senator Ron Wyden of Oregon said the repeal "tears a hole in our anti-money laundering defenses" and called on Congress to restore the requirement through legislation. Transparency advocates argue that anonymous shell companies are frequently used by bad actors for money laundering, tax evasion, and other illicit activities.
What the Numbers Show
Congress passed the Corporate Transparency Act in 2021 as part of a broader anti-money laundering bill, requiring most U.S. companies to report beneficial ownership information to FinCEN starting in January 2024. The law was projected to affect approximately 32.6 million existing companies and 5 million new businesses annually.
FinCEN estimated annual compliance costs at $561 million for all reporting companies under the original rule. Business groups had disputed this figure, arguing that actual costs would be significantly higher when accounting for legal fees, administrative work, and ongoing updates to ownership information.
A federal judge in Alabama issued a preliminary injunction blocking enforcement of the reporting requirement in March 2024, ruling that it likely exceeded congressional authority. The Treasury Department suspended enforcement while appealing the decision.
The Bottom Line
The repeal marks a significant shift in corporate transparency policy and returns beneficial ownership disclosure requirements to their pre-2021 status quo. Enforcement of any future similar requirements would require new legislation from Congress or a successful appeal of existing court challenges.
Business groups are likely to view this as a regulatory victory, while transparency advocates warn that the United States will now lag behind more than 100 countries that have implemented beneficial ownership registries. Watch for potential congressional action on companion legislation and ongoing litigation over the underlying authority for corporate disclosure requirements.