FinCEN Permanently Ends Beneficial Ownership Reporting For U.S. Companies
By CU Today Staff —
WASHINGTON—The Financial Crimes Enforcement Network has issued a final rule permanently eliminating beneficial ownership information reporting requirements for U.S. companies and U.S. persons under the Corporate Transparency Act.
FinCEN also said it will delete previously reported information involving U.S. persons from its beneficial ownership database.
“Today’s action is a victory for common sense and American small businesses,” Treasury Secretary Scott Bessent said. “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.”
Under the final rule, foreign entities that are reporting companies will still be required to report beneficial ownership information for foreign individuals.
In addition to the final rule, FinCEN has issued Frequently Asked Questions, and will be updating guidance on FinCEN.gov to reflect the final rule.
“DCUC strongly supports Treasury and FinCEN’s decision to permanently end beneficial ownership reporting requirements for U.S. companies and U.S. persons under the Corporate Transparency Act," stated Defense Credit Union Council Chief Advocacy Officer Jason Stverak. "This is common-sense regulatory relief that recognizes a simple fact: more paperwork does not automatically produce greater financial security.
Stverak noted that America can aggressively combat money laundering, fraud, terrorist financing, and other illicit activity without forcing millions of law-abiding small businesses to continually prove to the federal government that they are not criminals.
"Credit unions know firsthand the cost of regulatory requirements that accumulate over time. Every new reporting mandate requires technology, compliance resources, employee time, and ultimately money that could otherwise be devoted to serving members. Those costs matter particularly for smaller credit unions and the small businesses, military entrepreneurs, veterans, and military families they serve." he explained. "DCUC has consistently called for a modern, risk-based BSA/AML framework that focuses government and financial-institution resources where genuine threats exist. We should judge our financial-crime framework by whether it stops criminals and protects national security and not by the number of forms filed, databases created, or records collected."
FinCEN’s decision should also reinforce a broader regulatory principle: information should not be collected simply because the government has the ability to collect it, Stverak added.
"As Treasury implements the final rule and addresses previously submitted information, legitimate law enforcement and national security requirements must remain protected," he said. "Effective regulation is not synonymous with more regulation. The objective should be smarter regulation and today’s action moves us closer to that goal.”
Originally reported by CU Today.