Banking and Finance Law Daily Wrap Up, BANK SECRECY ACT—Senators Whitehouse, Grassley urge Treasury to nix new Corporate Transparency Act rule, (May 29, 2025)

By Suzanne Cosgrove

The Treasury’s interim final rule eliminates reporting requirements for more than 99 percent of corporations and LLCs that had been required to report.

Senators Sheldon Whitehouse (D-R.I.) and Charles E. Grassley (R-Iowa), this week urged the U.S. Treasury Department to rescind its Mar. 26, 2025, interim final rule (IFR) that requires only entities previously defined as “foreign reporting companies” to report beneficial ownership information under the Corporate Transparency Act (CTA).

Whitehouse and Grassley were the original sponsors of the TITLE Act, the precursor to the CTA.

In a letter sent to U.S. Treasury Secretary Scott Bessent, the senators said the rule would eliminate any reporting requirement for more than 99 percent of the entities that were previously required to report, and not only contravenes Congress’s intent as reflected in the CTA’s plain text and legislative history, “but it also undermines the operation of a law Congress deemed essential to protecting Americans’ national security and public safety.”

CTA’s history. In a release, the senators noted the CTA was designed to help protect national security and public safety by providing law enforcement and national security officials with the names of the true owners—beneficial ownership information (BOI)—of U.S. corporations and other legal entities formed or operating in the U.S.

Beneficial ownership information facilitates the government’s efforts to combat terrorist financing, money laundering, sanctions evasion, proliferation financing, tax evasion and other forms of illicit finance carried out through shell and front companies, they said.

The CTA, part of the Anti-Money Laundering Act of 2020, was enacted into law within the National Defense Authorization Act for Fiscal Year 2021 following a years-long bipartisan legislative process that included congressional hearings and support from the first Trump administration.

The CTA’s broad statutory definition of “reporting company” encompassed any entity, including those formed within the United States by U.S. persons, Whitehouse and Grassley said.

U.S. firms excluded. As reported previously (Banking and Finance Law Daily, Mar. 24, 2025), under a revised definition of “reporting company,” the Financial Crimes Enforcement Network (FinCEN) excluded U.S. companies, U.S. persons, and entities from its prior requirements to file beneficial ownership information (BOI) reports as mandated by the Corporate Transparency Act (CTA).

These entities, previously known as “domestic reporting companies,” also would not bet required to update or correct any previously submitted BOI reports, FinCEN added.

When introduced in March, the IFR, or “Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension,” was touted as part of the current Trump administration’s plans to eliminate burdensome federal regulations.

However, the Treasury Department’s decision to exempt U.S. persons and domestic entities from the CTA’s beneficial ownership information reporting requirements “is inconsistent with the text and original policy goals of the CTA,” the senators said.

“We encourage you to rescind this interim final rule and fully implement the CTA so that law enforcement and national security agencies around the country have access to information necessary to prevent human trafficking, terrorist financing, border smuggling, drug distribution, sanctions evasion, and many other categories of criminal activity,” they added.

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