Whitehouse, Grassley Issue Statement on Treasury Department’s Final Rule Dismantling Key Element of Corporate Transparency Act

Whitehouse & Grassley helped pass groundbreaking law to prevent abuse of U.S. incorporation laws Washington, DC – U.S. Senators Sheldon Whitehouse (D-RI) and Chuck Grassley (R-IA) today released the following statement on the U.S. Financial Crimes Enforcement Network’s (FinCEN’s) decision to permanently exempt over 99 percent of entities previously required to report their beneficial ownership information under the Corporate Transparency Act (CTA).  Congress passed the CTA on a strongly bipartisan basis to clamp down on criminals and foreign enemies hiding assets from U.S. law enforcement, national security officials, and tax authorities.  The CTA is widely considered the most important anti-money laundering law in decades. “The Treasury Department’s final rule exempting U.S. based companies from the Corporate Transparency Act’s reporting requirements undermines the clear intent of the law.  The Act gave the federal government needed tools to address criminal activity like human trafficking, terrorist financing, drug distribution, sanctions evasion, and more without unduly burdening legitimate commercial entities.  This decision is an unfortunate one that fails to use all available tools to protect Americans and crack down on illicit financial schemes.” The CTA was designed to play an important role in protecting national security and public safety by providing law enforcement and national security officials with the names of the true owners (“beneficial ownership information”) of U.S. corporations and other legal entities.  This information facilitates the government’s efforts to combat various forms of illicit finance carried out through shell and front companies. In March 2025, the Treasury Department announced that it would not enforce the CTA’s beneficial ownership information reporting rule when it comes to U.S. citizens or domestic reporting companies, and would issue a new proposed rulemaking that would narrow the scope of the rule to foreign reporting companies only.  A few weeks later, the Department published an interim final rule eliminating reporting requirements for more than 99 percent of corporations and LLCs that were previously required to report, as directed by Congress.  This week’s final rule makes permanent the sweeping exemptions and deletes all beneficial ownership information data that domestic companies had already submitted. Whitehouse and Grassley were the original sponsors of the TITLE Act, the precursor to the Corporate Transparency Act.  The CTA passed as part of the FY2021 National Defense Authorization Act after more than a decade of bipartisan congressional deliberation, and was supported by a wide range of government, anti-corruption groups, human rights organizations, faith communities, financial institutions, and real estate organizations.