The U.S. Treasury Department announced the suspension of enforcement of a small business ownership rule implemented during the Biden administration to combat money laundering and shell company formation.
Driving the news: The rule required businesses with fewer than 20 employees to register beneficial ownership information by January 1, 2024, as part of an effort to prevent illicit finance activities and shell company formations.
Go deeper: The initiative faced significant opposition, with business leaders expressing concerns about privacy, security, and duplication of databases maintained by other government agencies.
- Treasury Secretary Janet Yellen, who had supported the rule, argued that the regulatory burden was minimal, with a projected cost of $85 per business, while emphasizing the benefits it could offer to law enforcement in tracking down criminal activities.
- The Corporate Transparency Act, which provides the legislative authority for the rule, has been entangled in litigation, with a small business lobbying group suing to block the requirement for millions of small businesses to register with the government.
What they’re saying: “This Biden rule has been an absolute disaster for Small Businesses Nationwide,” Trump said on Truth Social. “The economic menace of BOI reporting will soon be no more.”
- U.S. Secretary of the Treasury Scott Bessent lauded the move.
- “This is a victory for common sense,” Bessent said. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”
