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There is little rhyme or reason for the Treasury Department’s final rule. If Treasury Secretary Scott Bessent is to be believed, it’s “a victory for common sense,” one that will eliminate a “burdensome” reporting requirement “without compromising our national security.”
The idea that this is a burdensome reporting requirement is bunk. Here is what the law (which, by the way, has not been repealed) requires: name, address, birthdate, government identification number, and picture of the physical ID for the beneficial owner. The whole thing takes five minutes or less to declare, and given that these are wealthy owners of shell companies, obtaining an ID is not a legitimate barrier, unless they are foreign oligarchs trying to launder cash.
Sen. Elizabeth Warren (D-MA), ranking member of the Senate Banking Committee, said in a statement that the repeal “is a gift to cartels, criminals, and U.S. adversaries that exploit shell companies to move millions through our financial system.” She also called on Bessent to reverse the decision, and to testify in front of the committee “to explain why he’s putting American national security at risk.”
Other members of Congress have reacted similarly. Among them are Sens. Sheldon Whitehouse (D-RI) and Chuck Grassley (R-IA), both of whom were original sponsors of the TITLE Act, the precursor to CTA. In a joint statement, they said the rule “undermines the clear intent of the law,” adding that it “fails to use all available tools to protect Americans and crack down on illicit financial schemes.”
As the senators point out, the legality of the rule is questionable. The question now is not if a legal challenge will emerge, but when.
“This pretty obviously guts the statute and violates the law,” Brendan Ballou, founder of the Public Integrity Project, told the Prospect in an email. “We are investigating whether and how to challenge this illegal action.”
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