U.S. Treasury scraps corporate ownership disclosure rule

The U.S. Treasury Department has finalized a rule that eliminates a key requirement for U.S. companies to disclose their ultimate owners. This decision rolls back a central component of the Corporate Transparency Act, a bipartisan law intended to provide law enforcement with information regarding opaque business structures.

Treasury Secretary Scott Bessent stated the move fulfills President Trump’s promise to reduce red tape, arguing that the previous reporting requirements imposed unnecessary costs on small-business owners. The National Federation of Independent Business supported the change, citing compliance costs for legitimate businesses.

However, lawmakers including Senator Chuck Grassley and Senator Sheldon Whitehouse argued the decision undermines the law’s intent. They noted the database, managed by the Financial Crimes Enforcement Network (FinCEN), was designed to help investigators track human trafficking, terrorist financing, drug distribution, and sanctions evasion. As of March, the database contained approximately 16.4 million reports.

Under the new regulations, U.S.-created companies and U.S. persons will generally be exempt from reporting, though foreign companies operating within the U.S. will remain subject to the requirements. FinCEN will also remove previously submitted information that it reasonably believes belongs to a U.S. person.