Trump Administration proposes eliminating CTA requirements for all U.S. companies
We noted that in our last Corporate Transparent Act update, on February 27, 2025 the Financial Crimes Enforcement Network, a bureau of U.S. Treasury Department announced that it will not take enforcement actions against companies that do not file or update the beneficial ownership information required by the CTA, until FinCEN issues a new interim regulation. Yesterday, the Treasury Department announced that it would not enforce any fines or penalties against “U.S. Citizens or domestic reporting firms or their beneficial owner’s are not required to file this information, even after the new interim regulation. Treasury Department will instead issue a proposed rulemaking that will “restrict the scope of the regulation to only foreign reporting companies.”
U.S. Treasury Secretary Scott Bessent stated: “This is a win for common sense. . . The announcement suggests that the new rule will exempt a category of companies covered by the text of the statute, which will increase the threat of litigation. The announcement suggests that the new rule will exempt a category of companies covered by the text of the statute, which will increase the threat of litigation.[and the Department’s]Meanwhile, CTA litigation proceeds. In one of many cases challenging the constitutionality of CTA, Small Business Association of Michigan v. Janet Yellen a Michigan federal court judge ruled that CTA is unconstitutional, because the statute’s beneficial owner requirements violate the Fourth Amendment guarantee of the U.S. Constitution against unreasonable searches. It is yet to be seen if the Trump Administration will challenge this decision. Thus far, the Administration has continued to contest any court rulings finding the CTA unconstitutional.
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