'Less bureaucracy': The Treasury eliminates the requirement that forced companies to disclose their owners

The Trump administration has permanently eliminated a federal requirement that compelled millions of U.S. companies to report to the federal government who owns or controls the company. The Biden administration had imposed the regulation. The deregulation was announced on Wednesday by the Treasury Department.

Until now, companies were required to submit information to the Financial Crimes Enforcement Network (FinCEN), a Treasury agency responsible for combating money laundering and other financial crimes.

The requirement took effect in 2024 and was part of the Corporate Transparency Act of 2021, which was passed as part of the National Defense Authorization Act of that same year.

The Department of the Treasury also announced that it would eliminate the existing database containing the data submitted to date.

Scott Bessent, secretary of the Treasury, praised the move in a statement: "Today's action is a victory for common sense and American small businesses."

"President Trump promised to cut red tape, and this final rule delivers. Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security," he added.

The change does not mean that U.S. businesses can operate without registering or that all their legal obligations will disappear. Companies must still comply with applicable tax, labor, and business regulations, including state requirements. However, the specific federal requirement to report the company's owners to FinCEN is being eliminated.

On the other side of the aisle, Democrats harshly criticized the Treasury's decision. Senator Elizabeth Warren, the ranking member of the Senate Banking, Housing, and Urban Affairs Committee, spoke out on social media: "This is a gift to cartels, criminals, and America's adversaries who exploit shell companies to move millions through our financial system."

"Secretary Bessent should testify in front of Congress to explain his decision to put our national security at risk," she added.