On Tuesday, July 18, the House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions held a hearing examining the Corporate Transparency Act (CTA), “Potential Consequences of FinCEN’s Beneficial Ownership Rulemaking.”
NSBA weighed in on the hearing urging lawmakers to do everything in their power to prevent the Corporate Transparency Act (CTA) from going into effect.
“The CTA is a poorly thought out and heavy-handed federal mandate that will be a bureaucratic nightmare for small-business owners. The law and subsequent regulations are painfully vague and ambiguous and could ensnare even the most benign of business advisors: a retired parent with expertise in accounting who counsels her son in opening a new business,” NSBA President Todd McCracken stated. “Surely Congress didn’t intend this law to punish the smallest of businesses—however that’s exactly what this law will do.”
During the hearing lawmakers on both sides of the aisle expressed skepticism about the workability of the regulations – some more forcefully than others.
Rep. Blaine Luetkemeyer (R-Mo.), Chair of the Subcommittee stated, “We are less than six months away from the CTA’s effective date of January 1, 2024, and we are left with more questions than answers.”
“I do not see how FinCEN can move forward with a January 1 BOI effective date without having a plan. I ask all of my colleagues to remember that if this filing system is not seamless, it is our small businesses picking up the pieces from COVID that will suffer,” Chair Luetkemeyer continued.
Ranking Member Joyce Beatty (D-Ohio) admitted there had been “certain flaws in FINCEN’s beneficial ownership rule-making that deviate from the intent of Congress.”
Rep. Patrick McHenry (R-N.C.), Chair of the House Financial Services Committee expressed his frustration over the final rule, stating, “The Treasury Department has made the final rule as complicated as possible. Altering timelines, definitions, and even failing to put together a simple filing form.” He went on to say, “It is clear if changes are not made Congress must act to delay the rule-making’s effective date.” Chair Luetkemeyer, a familiar face at past NSBA events, went a step further with his criticism of the final rule, “People’s private information, businesses private information, are going to be on a government server and the government has proved over and over again it cannot be a good steward of that information. This is nuts.”
RELATED | NSBA Urges Repeal of CTA
NSBA’s McCracken went on to state, “NSBA absolutely supports efforts to curtail money laundering, however the CTA is not the way. While we have filed a lawsuit against Treasury over the CTA, there is no guarantee the suit will be successful. It is not too late for Congress to help our nation’s job creators – I urge you to repeal or reform the CTA and protect small businesses from its insidious burden.”
Please visit www.NSBA.biz/CTA to learn more.
Click here to watch the hearing.