Aug 14, 2026
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Add us on GoogleThe Trump administration is nixing a rule that obligated shell companies disclose their ownership. Sen. Elizabeth Warren of Massachusetts slammed it as a move that will reward organized crime.
The Treasury Department announced on Tuesday that it would stop collecting data that determines the owners of private businesses as mandated under the Corporate Transparency Act. That registry was used by law enforcement to crack down on the use of shell companies for money-laundering and drug trafficking among other illegal activities. Former President Joe Biden signed it into law in 2021 after it passed Congress with bipartisan support, including from then-Sen. Marco Rubio, who now serves as Secretary of State.
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The Trump administration implemented a temporary reprieve on the so-called “beneficial ownership” requirements in March 2025. These owners had to submit their birth dates, names, business addresses, and driver’s license numbers in filings to the Financial Crimes Enforcement Network (FinCEN) at Treasury. That won’t be the case anymore.
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“This is a gift to cartels, criminals, and U.S. adversaries that exploit shell companies to move millions through our financial system,” Warren, the top Democrat on the Senate Banking panel, said in a statement.
“The Trump Administration has dismissed law enforcement warnings, ignored the role that shell companies play in crimes ranging from drug trafficking to fraud to sanctions evasion, and gutted a statute that Secretary Rubio once championed as ‘the most significant anti-corruption and money laundering law in decades.’”
The Treasury Department declined to comment. Treasury Secretary Scott Bessent had earlier said ending the disclosure requirements will shrink red tape for small businesses.
“Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security,” Bessent said in a social media post on Tuesday.
‘It’s like Trump ordering the deletion of the FBI’s fingerprint database’
Even one prominent Republican senator joined the criticism. Sens. Sheldon Whitehouse of Rhode Island, a Democrat, and Chuck Grassley of Iowa, a Republican, said in a statement that Treasury’s move “undermines” the law’s original intent.
“This decision is an unfortunate one that fails to use all available tools to protect Americans and crack down on illicit financial schemes,” the pair said.
One former lawmaker was more blunt: “It’s like Trump ordering the deletion of the FBI’s fingerprint database,” wrote ex-Rep. Tom Malinowski of New Jersey, a Democrat, on social media.
Shell companies usually don’t have a physical location and in many cases exist only on paper for owners to park their financial assets. Business groups had lobbied against the requirements as cumbersome to abide by and an invasion of privacy for small business owners.
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What has been achieved so far
Experts say that Treasury’s decision threatens to deal a major blow to anti-corruption efforts.
“By exempting domestic entities from beneficial ownership reporting, Treasury has created a loophole so large that the US corporate transparency requirements are functionally meaningless for anyone sophisticated enough to spend five minutes at a secretary of state’s website,” Jessica Tillipman, a government procurement law professor at George Washington University, wrote on social media.
FinCEN officials had detailed wrongdoing through shell companies before. Jimmy Kirby, the FinCEN deputy director, said in an Aug. 2024 speech that “anonymous shell companies” had been caught facilitating drug trafficking, human smuggling, fraud schemes and other criminal activities.
Kirby brought up the 2021 case of a Houston-based oil executive who pleaded guilty to laundering $7 million in bribe payments into bank accounts via shell companies he controlled in Panama and Switzerland. He then used the cash to purchase 15 properties around Houston.
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Joseph Zeballos-Roig is a policy and politics journalist based in Washington D.C with a focus on economics. He is experienced in connecting the significance of events in the capital to the lives of everyday Americans whether its taxes, tariffs, interest rates or federal programs.
