House panel moves to repeal CTA

The House Financial Services Committee voted 26-25 on April 21 to advance a bill that would effectively repeal the Corporate Transparency Act’s ownership-reporting rules. (occrp.org) The bill is H.R. 425, the Repealing Big Brother Overreach Act, introduced by Rep. Warren Davidson of Ohio on January 15, 2025. Committee staff said the measure had 191 cosponsors before this week’s markup. (congress.gov, congress.gov) The Corporate Transparency Act requires many companies to tell the Treasury Department’s Financial Crimes Enforcement Network who actually owns or controls them. Congress passed that law in December 2020 to help investigators trace shell companies used in money laundering and terrorism financing cases. (congress.gov, occrp.org) The committee’s substitute text would not simply erase the law on paper. It would limit beneficial-ownership reporting to certain foreign companies and foreign beneficial owners, and require deletion within 90 days of data tied to non-reporting companies and non-foreign owners. (dcuc.org) That approach tracks a major policy shift Treasury already made last year. On March 21, 2025, FinCEN issued an interim final rule removing the reporting requirement for U.S. companies and U.S. persons and keeping it mainly for certain foreign entities registered to do business in the United States. (fincen.gov) The immediate fight in Congress is now over whether to turn that narrower rule into statute and purge data already collected. Committee majority staff wrote that H.R. 425 would codify a regime that applies “exclusively to foreign-owned businesses” that meet the act’s reporting-company definition. (congress.gov) Supporters frame the bill as relief for small businesses and a privacy rollback. The S Corporation Association said the committee-approved version would end reporting requirements for more than 30 million American businesses. (s-corp.org) Opponents say the change would weaken a tool built to identify the real people behind anonymous entities. The Financial Accountability and Corporate Transparency Coalition said repeal would reopen gaps that criminals, cartels and foreign adversaries can use to move money through U.S. shell companies. (thefactcoalition.org, occrp.org) Banks are not the target of H.R. 425, but the practical effect would land on them. Accounting Today reported that without a federal beneficial-ownership database, banks would have to do more of the ownership-detection work themselves through account opening, periodic reviews and transaction monitoring. (accountingtoday.com) The committee said on April 22 that it had reported four bills to the full House, including H.R. 425. The next test is whether House leaders schedule the repeal measure for a floor vote. (financialservices.house.gov)