Trump Administration Halts Enforcement of Key Small Business Anti-Money Laundering Rule

The U.S. Treasury Department, under the Trump administration, has announced it will no longer enforce a pivotal Biden-era regulation that required small businesses to report beneficial ownership information. This decision, revealed in a Sunday evening statement, means the Treasury will not impose penalties on companies failing to register with the beneficial ownership information database, a system originally designed to combat money laundering and the formation of anonymous shell companies.

President Donald Trump quickly lauded the move on his Truth Social platform, describing the database as ‘outrageous and invasive’ and an ‘absolute disaster for Small Businesses Nationwide.’ He asserted that the ‘economic menace’ of beneficial ownership information (BOI) reporting would soon be eliminated.

The beneficial ownership rule, derived from the 2021 Corporate Transparency Act, had mandated that most American businesses with fewer than 20 employees register their owners with the government starting January 1, 2024. While proponents argued it was a vital tool for law enforcement to track illicit finance, critics, including numerous small business advocacy groups, raised significant concerns about privacy, data security, and the compliance burden.

U.S. Secretary of the Treasury Scott Bessent, speaking on Sunday, hailed the action as ‘a victory for common sense’ and an integral part of President Trump’s broader agenda to ‘rein in burdensome regulations.’ However, transparency advocates expressed strong disapproval. Ian Gary, executive director of the FACT Coalition, warned that the administration’s decision contradicts years of bipartisan efforts to eliminate anonymous shell companies, which he highlighted as favored tools for criminals, including fentanyl traffickers and money launderers.

The rule has been embroiled in litigation since its September 2022 rulemaking phase. While the rule technically remains in effect despite legal challenges, the Treasury’s latest directive effectively suspends enforcement, offering immediate relief to millions of small businesses previously facing compliance obligations.

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