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Treasury Department Issues Rule Ending Beneficial Ownership Reporting Requirements

U.S. Commerce Secretary Howard Lutnick and Secretary of the Treasury Scott Bessent were present as President Donald Trump signed executive orders in the Oval Office at the White House in Washington, D.C., on April 9, 2025. REUTERS/Nathan Howard

The Treasury Department under Secretary Scott Bessent issued a rule this month that eliminates the requirement for corporations and limited liability companies to report beneficial ownership information to the Financial Crimes Enforcement Network, known as FinCEN. The change also directs the agency to delete existing beneficial ownership records held on U.S. persons.

The Corporate Transparency Act, enacted in 2021 and sponsored by Senator Sherrod Brown, had required entities to disclose individuals who own or control them, referred to as beneficial owners. The law aimed to assist law enforcement in tracing financial flows through multiple layers of corporate structures. The new rule removes this ongoing reporting obligation and rescinds prior data collection.

Treasury officials stated that the modification reduces regulatory compliance costs for millions of small businesses and LLCs that had faced annual filing requirements. The department cited administrative burden as a primary factor in the decision. FinCEN simultaneously eased verification rules for banks opening additional accounts for existing companies and postponed until 2028 an anti-money laundering rule that would have applied to investment advisers.

Capital One Bank closed more than 300 Trump Organization accounts in 2021 after its internal fraud unit identified potential indicators of suspicious activity. The bank did not file a public accusation of money laundering against the organization. The Trump Organization responded with a lawsuit alleging that the account closures resulted from political considerations rather than evidence of violations.

Federal law prohibits foreign nationals, governments, and corporations from making contributions to influence U.S. elections. Enforcement of these provisions falls to the Federal Election Commission, which currently lacks a quorum because the administration has not appointed a required member. The commission’s website states that it cannot conduct enforcement actions until the quorum is restored.

The Organized Crime and Corruption Reporting Project has documented that at least $2.3 billion was laundered through U.S. real estate transactions over a five-year period. The project reported that more than 80 percent of examined cases involved funds originating outside the United States and that 82 percent used anonymous shell companies or layered corporate structures. Among G7 nations, the United States maintained the least restrictive regulatory framework for real estate money laundering at the time of the report. Canada, Australia, and the United Kingdom have implemented stricter identification rules for real estate purchases in recent years.

Public records show that the Trump Taj Mahal casino in 2015 entered a settlement with FinCEN acknowledging repeated failures to maintain required anti-money laundering records. The casino paid a $10 million civil penalty. Reporting from 2017 by Reuters identified at least 63 individuals holding Russian passports or addresses who purchased $98.4 million in Trump properties; roughly one-third of those purchases occurred through LLCs whose ownership Reuters could not fully trace.

Statements attributed to Donald Trump Jr. in 2008 at a real estate conference described Russian buyers as a significant portion of purchasers in Trump Organization projects. Eric Trump was quoted in a 2017 Golf magazine interview as stating that funding for projects came from sources outside U.S. banks, including Russia. A separate lawsuit filed by Kazakhstan’s BTA Bank alleged that associate Felix Sater facilitated transactions involving approximately $3 million in down payments on Trump SoHo units as part of an asserted international laundering scheme; the case did not result in a final judicial finding against the Trump Organization.

The Mueller Report and subsequent public accounts described Russian government efforts to influence the 2016 presidential election through social media and other means. Similar activities were reported in connection with later election cycles. Federal prohibitions on foreign election spending remain in place, though the absence of an FEC quorum limits administrative enforcement actions.

The rule change removes the federal database that previously collected beneficial ownership data. Investigators seeking to identify the individuals behind domestic shell companies used in real estate or political spending will now rely on other records, such as state filings or bank due diligence materials. The Treasury action does not alter existing Bank Secrecy Act obligations for financial institutions to report suspicious transactions.

Critics of the prior Corporate Transparency Act argued that the reporting mandate imposed disproportionate costs on legitimate small businesses with no connection to international finance. Supporters maintained that the information assisted in identifying patterns of illicit finance. The current administration has framed the rollback as part of a broader effort to reduce federal regulatory requirements.

The Federal Election Commission continues to operate without a quorum, preventing it from initiating or completing enforcement proceedings on foreign spending complaints. Political committees must still file disclosure reports listing contributors, but those reports do not include underlying ownership details for LLC donors.

No criminal charges have been filed against the Trump Organization in connection with the Capital One account closures. The Treasury rule applies uniformly to all reporting entities and does not contain exemptions based on prior ownership records.