Lawmakers Probe Treasury’s Move to Limit Corporate Transparency Act
Senate Banking Committee ranking member Elizabeth Warren, D-Mass., and House Financial Services Committee ranking member Maxine Waters, D-Calif., asked the Treasury Department Sept. 15 whether it analyzed the national security consequences of its decision to narrow the scope of a rule implementing the Corporate Transparency Act (CTA).
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In a letter to Treasury Secretary Scott Bessent, the lawmakers said they’re concerned the rule change may make it easier for bad actors, including Iran sanctions evaders and those illegally exporting technology for China’s military, to use shell companies to hide money or property in the U.S. They want to know how Treasury will prevent such abuses under the revised rule.
The lawmakers said the administration’s responses to previous congressional inquiries about the rule change, including a March letter from Sens. Sheldon Whitehouse, D-R.I., and Chuck Grassley, R-Iowa, (see 2503110025) “provided no meaningful information about how Treasury is addressing the national security and illicit finance concerns” that the CTA was designed to address when it was enacted in 2021. Treasury didn't respond to our request to comment on the Warren-Waters letter.
The Financial Crimes Enforcement Network issued an interim final rule in March that modifies its beneficial ownership information (BOI) reporting rule so that it applies only to foreign companies and not U.S. businesses. Bessent has said the change is part of President Donald Trump’s agenda to reduce “burdensome regulations,” especially for American small businesses (see 2503030042). FinCEN plans to finalize the new rule this year (see 2509090044).