U.S. Treasury Department announces interim rule
During a recent episode of the National Cattlemen’s Beef Association (NCBA) Beltway Beef podcast, dated March 25, NCBA Executive Director of Government Affairs Kent Bacus shares updates on the U.S. Treasury Department’s new interim final rule protecting small businesses.
The U.S. Department of the Treasury published the Financial Crimes Enforcement Network (FinCEN) interim final rule removing the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA), narrowing the scope of the rule to foreign reporting companies.
Publication in the Federal Register follows FinCEN’s announcement on March 21, declaring it is issuing this interim final rule.
The interim final rule is effective immediately. FinCEN is currently accepting comments and intends to finalize the rule this year.
“It is important to rein in burdensome regulations to the benefit of hard-working American taxpayers and small businesses,” says U.S. Treasury Secretary Scott Bessent in a recent press release. “As we continue to re-leverage the private sector and de-leverage the government, we are reviewing all regulations to ensure they are fit for purpose, in furtherance of our ambitious economic growth agenda on behalf of the American people.”
NCBA responds
“We are excited we finally have a reprieve from the CTA. Now domestic small businesses are no longer required to comply with it,” Bacus states. “With the CTA, producers would have had to disclose their BOI to the U.S. Department of the Treasury, which raised a lot of concern. Many businesses were unaware and could have gotten caught up in the compliance part of it, leading to penalties and/or jail time.”
According to Bacus, without President Donald J. Trump’s intervention, millions of small business owners may have been in violation. He noted NCBA greatly appreciates the U.S. Department of the Treasury developing a new rule to provide certainty for small businesses and protect American agriculture.
He continues, “It’s a big win and a giant sigh of relief for cattle producers across the country.”
Producers voiced significant concerns regarding the Biden administration’s impending deadline to enforce the CTA, emphasizing the potential impact on their operations and the industry as a whole.
“NCBA had asked for further extension, but the Biden administration refused to take action and continued to move forward trying to enforce it,” Bacus says. “But, Trump stepped in and said, ‘We are not going to place this burden on small businesses.̕ Instead, the department will focus their efforts on individuals who are actually suspects of money laundering and criminals.”
Moving forward, a big focus for NCBA is to continue working with Congress to ensure future administrations do not decide to come back and revive the CTA, with hopes to change laws permanently.
He notes, “There will be individuals who will challenge this and push to enforce it, but NCBA does not want that. We want long-term permanency and clarity to clear up any problems or questions the court system may encounter or other legal challenges out there. It’s good to know Trump is listening to us and has heard how this would affect rural America.”
Recent hearing
At the April 1 hearing of the U.S. House Financial Services Subcommittee on National Security, Illicit Finance and International Financial Institutions, the subcommittee reviewed several bills to help combat fraud, including repealing the Big Brother Overreach Act, which would in turn repeal the CTA.
Up for discussion during the hearing was legislation to repeal the CTA entirely or to amend the statute to specify only foreign entities are subject to the requirements.
Subcommittee Chair Warren Davidson (R-OH) opened the hearing by expressing appreciation to the Trump administration for rolling back CTA reporting requirements.
“Our Constitution says, when the government wants to know private information, they need probable cause – at least reasonable suspicion – to get a warrant or a subpoena,” Davidson states. “Surely we can minimize the financial harm suffered by Americans without infringing on their civil liberties or adding ways to make ordinary citizens criminals.”
National Federation of Independent Business Vice President of Federal Government Relations Jeff Brabant adds, “It is especially frustrating for small businesses when Congressionally mandated reporting requirements open their businesses up to data privacy threats.”
He went on to mention, a prime example of this is the CTA. Under the CTA, small businesses with fewer than 20 employees and $5 million in revenue are required to report their BOI to the FinCEN.
“Small businesses are optimistic the Trump administration and 119th Congress will provide certainty for small businesses to grow, invest and hire new employees. But doing so requires Congress to roll up its sleeves and get busy providing tax certainty, reducing regulatory burdens and eliminating overly broad statutes like the CTA,” he adds.
Melissa Anderson is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
