On May 27, 2025, Senators Sheldon Whitehouse (D-RI) and Charles E. Grassley (R-IA) submitted a comment to US Treasury Secretary Scott Bessent expressing strong opposition to the Financial Crime Enforcement Network’s Interim Final Rule eliminating the beneficial owner reporting requirement for US entities.1 The bipartisan letter responds to the Interim Final Rule “Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension,” which was published for notice-and-comment on March 26, 2025. The Financial Crime Enforcement Network (FinCEN) intends to issue a final rule later this year.2
Background
As discussed in our prior legal alerts (collated here), the Corporate Transparency Act (CTA) requires certain companies registered or created to do business within the United States to file reports with FinCEN about their beneficial owners. Before the Interim Final Rule was released, FinCEN had promulgated rules requiring companies created in the US (domestic reporting companies) as well as foreign companies doing business within the US (foreign reporting companies) to file beneficial ownership information (BOI) reports unless they fell within one of 23 exemptions.3
After significant legal battles regarding the CTA’s constitutionality, the second Trump Administration has taken a different approach to the controversial statute. Under the Interim Final Rule, domestic reporting companies are now exempt, meaning that they are no longer required to file initial or updated BOI reports. The Interim Final Rule also exempts companies from reporting information about US beneficial owners. Now, only foreign reporting companies that do not fall within one of the 23 exemptions are required to file BOI reports providing information about non-US beneficial owners.
The Bipartisan Congressional Comment
The Senators’ comment letter firmly opposes the Interim Final Rule, stating that the “decision to categorically exempt all US 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 letter, citing the plain text of the statute and numerous examples from the Congressional Record, argues that the statute unambiguously applies to domestic entities. The letter also highlights the importance of domestic entities’ beneficial ownership information to national security and the first Trump Administration’s “robust input and support” while the CTA was being drafted as reasons to rescind the Interim Final Rule.
Conflicting Messages?
At the same time, Republican members of the House of Representatives and the Senate have reintroduced legislation to completely repeal the CTA.4 The bills, both titled “Repealing Big Brother Overreach Act,” would eliminate the reporting requirement for all companies if passed into law. In addition, President Trump has referred to the CTA as an “absolute disaster,” and various business associations have thanked the Administration for suspending enforcement of the CTA against domestic companies.5
Conclusion
Amid widespread strong opposition to the CTA’s reporting requirements, the bipartisan comment letter submitted by Senators Whitehouse and Grassley is a clear indication that at least some members of Congress do not agree with the Trump Administration’s interpretation and implementation of the CTA’s reporting requirements. Affected businesses may monitor the upcoming rulemaking process as well as legislative initiatives during the coming months for further updates.
1 Press Release, Office of Sen. Sheldon Whitehouse, Whitehouse, Grassley Urge Treasury Department to Scrap New Corporate Transparency Act Rule that Violates Congressional Intent (May 28, 2025), available at https://www.whitehouse.senate.gov/news/release/whitehouse-grassley-urge-treasury-department-to-scrap-new-corporate-transparency-act-rule-that-violates-congressional-intent/; Letter from Sheldon Whitehouse and Charles Grassley, US Sens., to Scott Bessent, Treas. Sec. (May 27, 2025), available at https://www.whitehouse.senate.gov/wp-content/uploads/2025/05/2025-05-27-Whitehouse-Grassley-Comment-Letter-on-CTA-Interim-Final-Rule-SIGNED-FINAL.pdf.
2 90 Fed. Reg. 13688, https://www.federalregister.gov/documents/2025/03/26/2025-05199/beneficial-ownership-information-reporting-requirement-revision-and-deadline-extension.
3 Corporate Transparency Act, 31 USC. § 5336, and its implementing regulations.
4 S. 100, 119th Cong. (2025), https://www.congress.gov/bill/119th-congress/senate-bill/100; H.R. 425, 119th Cong. (2025), https://www.congress.gov/bill/119th-congress/house-bill/425.
5 Donald Trump (@realDonaldTrump), Truth Social (Mar. 2, 2025, at 21:20 ET), https://truthsocial.com/@realDonaldTrump/posts/114096106742782827; Press Release, Nat’l Cattlemen’s Beef Ass’n, Cattlemen Thank Trump Administration for Protecting Small Businesses from Corporate Transparency Act (Mar. 3, 2025), https://www.ncba.org/news-media/news/details/42309/cattlemen-thank-trump-administration-for-protecting-small-businesses-from-corporate-transparency-act; https://www.nsbaadvocate.org/post/press-treasury-announces-broad-cta-roll-back; Press Release, Nat’l Small Bus. Ass’n, Treasury Announces Broad CTA Roll-Back (Mar. 3, 2025), https://www.nfib.com/news/press-release/nfib-statement-on-fincen-removing-beneficial-ownership-requirements-for-americas-small-businesses/.
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