U.S. Rep. Dan Meuser (R-PA) leveled criticism at the Financial Crimes Enforcement Network (FinCEN) for its lack of support for small businesses related to a recent rule change.
Specifically, Meuser took issue with what he called inadequate efforts to assist small businesses with the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements.
The BOI reporting requirements under the CTA mandate that small businesses report extensive ownership and control information to FinCEN. Meuser said the rules are overly burdensome for small businesses and do not reflect what Congress intended in the CTA. Meuser said small businesses face particular challenges because they often lack the resources to comply with complex federal requirements,
The new rules were set to take effect on Jan. 1, 2025. Meuser said it is an insufficient period of time for businesses to adapt amidst legal uncertainties following a preliminary injunction. If small businesses do not comply, they face a penalty of up to $10,000
The court case, Texas Top Cop Shop, Inc. v. Garland, resulted in a preliminary injunction by Judge Amos Mazzant. It found CTA and its rules likely unconstitutional. This decision halts enforcement temporarily but creates ambiguity for small businesses about their compliance obligations. Thus, said Meuser, this creates the need for clearer guidance from FinCEN.
“This injunction provides temporary relief, but FinCEN’s failures have left small businesses in the lurch,” Meuser said. “Despite oversight hearings, briefings, and repeated calls for action, FinCEN has done a supremely inadequate job helping small businesses understand or comply with these requirements. It’s time for them to step up, provide clear guidance, and formally delay enforcement to avoid crushing penalties and costs of up to $10,000 for businesses already struggling to keep their doors open.”
Meuser, along with a group of lawmakers, sent a letter to FinCEN, demanding that it immediately clarify how the injunction impacts compliance obligations.
“Small businesses are the strength of our economy, yet FinCEN’s lack of preparation has turned this regulatory requirement into a significant burden,” Meuser said. “The January 1 deadline was never realistic given the chaos FinCEN created. We need immediate action to ensure businesses are not penalized for FinCEN’s incompetence.”