HR425-119

What This Bill Does

The "Repealing Big Brother Overreach Act" completely eliminates the Corporate Transparency Act, which currently requires most corporations and limited liability companies (LLCs) to disclose their true owners to the federal government. This bill would return the United States to a system where companies can be formed and operate with complete anonymity about who actually owns and controls them. The bill also removes all penalties and enforcement mechanisms that were created to ensure companies complied with beneficial ownership reporting requirements.

Who Benefits and How

This bill directly benefits millions of private companies and LLCs that would otherwise be required to file beneficial ownership reports with the Financial Crimes Enforcement Network (FinCEN). These entities would avoid compliance costs estimated at hundreds of dollars per filing and would no longer face civil penalties of up to $10,000 for failing to report or update ownership information. Real estate investors who use LLCs to purchase property anonymously would maintain their privacy. Private equity firms, law firms, and accountants who help clients establish corporate structures would face less regulatory burden and could continue offering anonymous entity formation services without disclosure requirements.

Who Bears the Burden and How

Law enforcement agencies investigating financial crimes, money laundering, tax evasion, and corruption would lose a critical investigative tool. The Financial Crimes Enforcement Network (FinCEN) would be unable to collect beneficial ownership data that helps identify criminals hiding behind shell companies. Federal and state prosecutors pursuing corporate fraud cases would face higher barriers to identifying the real individuals behind anonymous entities. Banks and financial institutions would have greater difficulty conducting anti-money laundering due diligence, potentially exposing them to regulatory risks. Transparency advocates and anti-corruption groups would see a major setback in efforts to combat the use of anonymous shell companies for illicit purposes.

Key Provisions

• Fully repeals the Corporate Transparency Act that was enacted as part of the 2021 National Defense Authorization Act
• Eliminates the requirement for corporations and LLCs to report beneficial ownership information to FinCEN
• Removes Section 5336 from Title 31 of the U.S. Code, which established the beneficial ownership reporting framework
• Strips out all civil penalty provisions in Title 31 that allowed FinCEN to fine companies up to $10,000 for failing to file or update beneficial ownership reports
• Repeals related provisions from the Anti-Money Laundering Act of 2020 that supported the beneficial ownership reporting system