On March 2, 2025, the U.S. Treasury Department announced a significant policy shift, suspending the enforcement of the Corporate Transparency Act (CTA) against U.S. citizens and domestic reporting companies. This decision, hailed as a “victory for common sense” by Treasury Secretary Scott Bessent, marks a rollback of a Biden-era initiative aimed at curbing money laundering and shell company abuses through mandatory beneficial ownership information (BOI) reporting.
The CTA, enacted in January 2021, required millions of businesses to disclose details about their owners to the Financial Crimes Enforcement Network (FinCEN), a Treasury division, to enhance financial transparency. However, the law faced persistent legal challenges and criticism from small business advocates who argued it imposed burdensome regulations. Multiple federal court rulings, including a notable March 2024 decision in Alabama deeming the CTA unconstitutional, delayed its implementation.
Under the new directive, Treasury will not impose penalties or fines for noncompliance with BOI reporting deadlines, either now or after forthcoming rule changes take effect. The department plans to issue a proposed rulemaking that narrows the CTA’s scope to foreign reporting companies only, effectively exempting American businesses. This aligns with President Donald Trump’s agenda to reduce regulatory burdens, a move he celebrated on Truth Social, calling the BOI rule “outrageous and invasive.”
Supporters of the suspension argue it relieves small businesses from costly compliance, while critics, including some Democrats and transparency advocates, warn it could weaken efforts to combat financial crimes. As of March 3, 2025, the CTA remains in legal limbo, with Treasury’s focus shifting to foreign entities, leaving the future of domestic transparency measures uncertain. Businesses and lawmakers alike await further guidance as the department finalizes its emergency regulation.