Efforts to repeal the Corporate Transparency Act (CTA) resurfaced on Wednesday, as a group of Republican lawmakers introduced companion bills in the Senate and the House of Representatives. The legislation, aimed at dismantling the bipartisan act passed in 2021, underscores ongoing debates over government overreach and small-business privacy.
The CTA was designed to combat the misuse of anonymous shell companies, requiring millions of U.S. businesses to disclose their true ownership to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The law’s objective is to track illicit financial flows and promote transparency, but critics argue it burdens small businesses with onerous compliance requirements.
Renewed Legislative Push
Senator Tommy Tuberville (R., Ala.) introduced the Repealing Big Brother Overreach Act in the Senate, supported by 21 Republican senators. Congressman Warren Davidson (R., Ohio) presented companion legislation in the House with 66 Republican co-sponsors. Both lawmakers criticized the CTA’s requirements as invasive and impractical for small-business owners.
“This was poorly written, it was poorly managed,” Tuberville stated, adding that the law holds taxpayers hostage with unnecessary government demands. Davidson echoed this sentiment, labeling the CTA a “disaster for small businesses” that infringes on privacy rights by mandating the disclosure of sensitive ownership details.
The move comes as the CTA faces legal challenges in federal courts. A national injunction paused the law’s implementation last month, with Supreme Court Justice Samuel Alito set to rule on its validity soon. Tuberville acknowledged the uncertain outcome, saying the legislation is a contingency plan if the Court does not uphold the injunction.
The repeal effort is backed by 100 trade groups, including the National Federation of Independent Business, an influential small-business advocacy organization. However, this is the second time the lawmakers have attempted to repeal the CTA; similar legislation introduced last spring failed to advance.
The Debate: Privacy vs. Transparency
Proponents of the CTA, such as Transparency International U.S., argue that the act is a critical tool for curbing corruption. The law has enjoyed bipartisan support, including backing from the Trump administration.
“We have absolutely no reason to think that the Trump administration has changed its strong support of the CTA,” said Scott Greytak, director of advocacy at Transparency International U.S.
On the opposing side, Tuberville emphasized that many small-business owners remain unaware of the law or lack the resources to comply with its requirements. He criticized FinCEN for insufficient communication and called for greater publicity efforts to inform affected businesses.
“The meat of the problem here is the overreach and non-communication from the federal government,” he said.