In effect, the government will no longer require shell companies to disclose their owners and beneficiaries, allowing wealthy corporations and individuals to hide their profits from the public. The rule was part of the Corporate Transparency Act, or CTA, passed in 2021, which required some businesses to report information on people who own or control a company, indirectly or directly, to the department’s Financial Crimes Enforcement Network.
Trump quickly took to Truth Social after the Treasury announcement, posting, “Exciting News!”
“This Biden rule has been an absolute disaster for Small Businesses Nationwide,” Trump’s post read. “Furthermore, the Treasury is now finalizing an Emergency Regulation to formally suspend this rule for American businesses. The economic menace of [Beneficial Ownership Information] reporting will soon be no more.”
Republicans have long opposed the CTA, claiming that the requirements are too steep for small businesses and companies to fulfill. The rule on beneficial ownership was supposed to go into effect in January, but a federal court order froze enforcement of the rule. The CTA was passed by the Biden administration to tackle tax evasion and corporate cronyism, which, unsurprisingly, is at odds with the Trump administration.
Since his inauguration, Trump has gone after financial regulation as well as government agencies that seek to curb corporate power, such as the Consumer Financial Protection Bureau. Earlier this month, the president also issued an executive order freezing enforcement of the 48-year-old Foreign Corrupt Practices Act, which prohibits any person or company tied to the United States from paying money or offering gifts to foreign officials to help their business.
It seems that Trump wants his friends in the corporate world, as well as his own businesses, to be able to rake in profits with much less restrictions, and if they so choose, hide them from the public. It will now be easier for a business with unpopular practices, or a president with shady business interests, to avoid scrutiny.