Treasury Kills Shell-Company Ownership Rule, Wipes Database

"Today's action is a victory for common sense and American small businesses," Bessent said. "President Trump promised to cut red tape, and this final rule delivers. Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security."

Scott Greytak, executive deputy director of Transparency International U.S., said the opposite: "The United States Treasury has taken a step that enables criminals to continue financing and profiting from their crimes by using anonymous companies formed in the United States as their 'getaway vehicles.'"

Greytak said the rule exempts "more than 99 percent of U.S. companies" from the Corporate Transparency Act and frustrates law enforcement's ability to investigate cartel finances "at the precise moment when the Trump Administration claims to be exerting maximum pressure in the fight against fentanyl." He pointed to the Zheng drug-trafficking case, in which federal prosecutors documented front companies in Massachusetts used to receive, repackage and redistribute fentanyl and other synthetic drugs.

The National District Attorneys Association also opposes the change. Executive director Nelson Bunn said it will "significantly hinder…prosecutors' ability to identify the bad actors from legitimate businesses when investigating U.S. shell companies used by transnational cartels, human traffickers, and cyberscammers."

Writing in The Atlantic, author Casey Michel argued the move "effectively undoes years of progress in curbing devious financial networks" and reopens the U.S. as a haven for hidden money, including untraceable spending in American elections. That is commentary, not a finding.

The Legal Fight

The Financial Accountability and Corporate Transparency (FACT) Coalition and other opponents argue the repeal is unconstitutional because the Corporate Transparency Act is still on the books — an agency, they say, cannot rule away a statute.

Treasury rejects that. It says "disagreements over the specifics of executive branch implementation" of the law "are not evidence of unconstitutional behavior."