Rep. Warren Davidson, Sen. Jim Banks Urge Secretary Bessent to Eliminate Burdensome Red Tape Threatening Small Businesses

WASHINGTON, D.C. - Today, Representative Warren Davidson (R-OH) and Senator Jim Banks (R-IN) led 85 colleagues in sending a letter to Secretary of the Treasury Scott Bessent, FinCEN Director Andrea Gacki, National Economic Council Director Kevin Hassett, and President Donald Trump to urge the Department to eliminate unnecessary red tape and exempt U.S. businesses from the Corporate Transparency Act's (CTA) Beneficial Ownership Information (BOI) reporting requirements.

"The CTA is intended to fight money laundering, a well-intentioned goal. However, the reality is that drug traffickers like El Chapo or criminals with shell companies will not file their beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN)," the lawmakers wrote. "These criminals do not fear the harsh civil and criminal penalties-up to a $10,000 fine and 2 years in prison- under the CTA. However, the 32.6 million law-abiding small business owners who do the right things and pay their taxes on time will register with FinCEN."

"As Congress works to provide long-term relief from the CTA, we urge the Department of Treasury and FinCEN to promulgate a final rule that exempts U.S. businesses from the CTA," the letter continued.

"The Corporate Transparency Act is one of the most burdensome small business regulations in history, unfairly targeting mom-and-pop shops while doing little to stop real criminals. Instead of curbing money laundering, it saddles more than 30 million law-abiding small businesses with compliance mandates and risks exposing their sensitive information," said Rep. Warren Davidson. "Small businesses are the backbone of our communities, and they should not be treated like criminals. That's exactly why we are demanding action, and why I've sponsored the Repealing Big Brother Overreach Act-to relieve small business owners from invasive red tape."

Background:

• The CTA was inserted into the 2021 National Defense Authorization Act at the height of the COVID-19 pandemic with little public debate.
• The law applies only to small businesses - those with fewer than 20 employees and under $5 million in revenue - while exempting large corporations.
• Small businesses must report "beneficial ownership" information to the Financial Crimes Enforcement Network (FinCEN) or face penalties of up to $10,000 and 2 years in prison.
• This sweeping mandate imposes tens of billions of dollars in compliance costs on 32.6 million law-abiding small businesses, while criminals, drug cartels, and foreign actors are unlikely to comply.
• Sensitive data collected under the CTA can be accessed by state, federal, and international authorities without a subpoena or warrant, raising serious privacy and cybersecurity concerns.
• President Trump previously denounced the CTA as "invasive, outrageous, and an economic menace," recognizing its threat to America's small businesses.
• In January, Rep. Davidson introduced the Repealing Big Brother Overreach Act to repeal the CTA.
• The full text of the letter can be found here.

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