Repealing Big Brother Overreach Act
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As reported by committee, the bill would narrow the Corporate Transparency Act's beneficial ownership reporting requirement so it applies only to foreign individuals and foreign-formed companies, rather than repealing it outright as the title suggests.
It would also require the Treasury Department's Financial Crimes Enforcement Network to delete, within 90 days, all beneficial ownership data it has already collected on domestic owners and companies that would no longer be covered.
What this bill would do
What it would do
Although titled a repeal of the Corporate Transparency Act, the version reported by the Financial Services Committee would instead amend the beneficial ownership reporting statute (31 U.S.C. § 5336) rather than eliminate it. It would insert the word "foreign" throughout the section so that only foreign individuals and companies formed under foreign law would qualify as "beneficial owners" or "reporting companies" subject to disclosure to the Financial Crimes Enforcement Network, an anti-money-laundering and counterterrorism-financing tool. The bill would also require the Financial Crimes Enforcement Network, within 90 days of enactment, to delete all beneficial ownership information it has already collected on individuals who are not foreign beneficial owners and on entities that would no longer qualify as reporting companies. It would not touch other anti-money-laundering statutes or Treasury's broader financial-crimes authorities.
Key provisions
- 1Would amend the definitions of "beneficial owner" and "reporting company" in the beneficial ownership statute so they apply only to foreign individuals and foreign-formed entities
- 2Would require the Financial Crimes Enforcement Network to delete, within 90 days of enactment, previously collected beneficial ownership data on individuals and entities no longer covered
Who would be affected
Domestic small businesses and their owners who currently must report beneficial ownership information would be relieved of that requirement, while foreign individuals and foreign-formed companies operating in the United States would remain subject to reporting. The Financial Crimes Enforcement Network and the Department of the Treasury would have new data-deletion obligations.
Why it matters
Millions of small businesses that registered beneficial ownership data under the Corporate Transparency Act could see that requirement lifted and their existing records deleted, reducing compliance burdens. Law enforcement and anti-money-laundering advocates have raised concerns that narrowing reporting to only foreign entities could reduce visibility into anonymous shell companies used for domestic financial crime.
What would change
Changes to existing law
Amends Corporate Transparency Act (31 U.S.C. § 5336) (Sec. 2(a))
Narrows beneficial ownership reporting to foreign individuals and foreign-formed entities, removing domestic owners and companies from the requirement
Agencies directed to act
Effective dates
- Deadline for FinCEN to delete beneficial ownership data on non-foreign owners and non-covered entities
How implementation would work
The Financial Crimes Enforcement Network would need to reprogram its beneficial ownership database to reflect the narrowed definitions limiting reporting to foreign persons and foreign-formed entities. Within 90 days of enactment, it would have to identify and delete records for individuals and companies that no longer qualify as foreign beneficial owners or reporting companies, effectively purging most existing domestic filings while retaining a database focused on foreign-linked entities going forward.
Legislative status & sources
Latest action
Placed on the Union Calendar, Calendar No. 609.
Official CRS summary
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This bill repeals the Corporate Transparency Act. The act requires existing companies and newly created companies to report beneficial ownership information to the Department of the Treasury’s Financial Crimes Enforcement Network for purposes of addressing the financing of terrorism and money laundering.
Legislative subjects
Banking and financial institutions regulation; Business records; Corporate finance and management; Department of the Treasury; Finance and Financial Sector; Fraud offenses and financial crimes; Terrorism