Sen. Chuck Grassley (R-Iowa) and Sen. Sheldon Whitehouse (D-R.I.) issued a joint statement Thursday criticizing the Treasury Department's decision to exempt approximately 99 percent of entities from beneficial ownership reporting requirements previously mandated under the Corporate Transparency Act.
The bipartisan pair of senators said the final rule, published Tuesday by the Financial Crimes Enforcement Network (FinCEN), significantly narrows the scope of companies required to report ownership information to the federal government. The move affects small businesses and other entities that would have been required to disclose their beneficial owners under earlier regulations aimed at combating money laundering and shell company abuse.
What the Right Is Saying
Grassley, a Republican from Iowa, joined Whitehouse in the bipartisan criticism, suggesting the rulemaking exceeds congressional intent. The senior senator has historically supported anti-money laundering measures while also advocating for reducing regulatory burdens on small businesses. Grassley's office emphasized that the exemptions depart from legislation passed with broad bipartisan support and could create loopholes exploited by bad actors.
What the Left Is Saying
Whitehouse, a Democrat from Rhode Island who has championed anti-corruption legislation, framed the Treasury decision as a retreat from bipartisan transparency efforts. The senator argued that narrowing beneficial ownership reporting limits the ability of law enforcement to trace illicit funds through complex corporate structures. Whitehouse and other progressive advocates have maintained that comprehensive ownership disclosure is essential for identifying bad actors who exploit anonymous shell companies for criminal purposes.
What the Numbers Show
The Corporate Transparency Act, enacted in 2021 as part of a broader defense bill, originally required millions of U.S. companies to report beneficial ownership information to FinCEN. The Treasury Department's final rule narrows reporting requirements to approximately 5.9 million entities, down from initial estimates that would have covered more than 27 million businesses. Under the revised framework, companies with over $5 million in revenue and more than 20 employees may qualify for exemptions.
The Bottom Line
The rare bipartisan criticism from Grassley and Whitehouse signals potential legislative pushback against Treasury's rulemaking. Congress could move to overturn the regulation under the Congressional Review Act, though such efforts would require support from both chambers. Law enforcement groups and anti-corruption advocates are expected to weigh in as implementation proceeds. The FinCEN rule takes effect following a transition period for affected entities.