(Headline USA) The U.S. Treasury Department announced it will not enforce a constitutionally dubious law started under Biden’s administration that would require companies to submit their private ownership information to a central database.
In a Sunday evening announcement, Treasury said in a news release that it will not impose penalties now or in the future if companies fail to register for the agency’s beneficial ownership information database.
Despite efforts by small businesses to undue the rule in the courts, it remains in effect.
On Sunday, President Donald Trump on his Truth Social media site praised the suspension of enforcement of the rule and said the database is “outrageous and invasive.”
“This Biden rule has been an absolute disaster for Small Businesses Nationwide,” he said. “The economic menace of BOI reporting will soon be no more.”
In September 2022, the Treasury Department started rulemaking to create a database that would contain personal information on the owners of at least 32 million U.S. businesses.
The rule required most American businesses with fewer than 20 employees to register their business owners with the government as of Jan. 1, 2024.
The rule and its legislative authority—the Corporate Transparency Act, an anti-money laundering statue passed in 2021—have been mired in litigation. In 2022, a small business lobbying group sued to block the Treasury Department’s requirement that tens of millions of small businesses register with the government. On Feb. 27, Treasury’s Financial Crimes and Enforcement Network said it would not take enforcement actions against companies that do not file beneficial ownership data with the agency.
Business leaders cite privacy and security concerns about the database and say it is duplicative to other government agencies that maintain corporate databases.
“This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent on Sunday. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”
Adapted from reporting by the Associated Press
