MSCI Says Congress Must Repeal Corporate Transparency Act

On April 29, the Metals Service Center Institute, along with nearly 100 other trade associations, sent a letter asking members of Congress to approve legislation introduced by Rep. Warren Davidson (R-Ohio) that would repeal the Corporate Transparency Act (CTA).

As Connecting the Dots has noted several times, the CTA took effect this year and requires small businesses and other covered entities to report the personal information of their owners and managers to the Financial Crimes Enforcement Network (FinCEN) at the U.S. Treasury Department.

The letter argues the CTA saddles law-abiding business owners with compliance headaches and criminal penalties — while doing little or nothing to combat illicit financial activity. “Despite its unprecedented scope, we expect the CTA to be of little practical use to law enforcement [since] criminals are unlikely to accurately self-report their information to FinCEN,” the signers argued. “Meanwhile, because the CTA targets entities with low revenues and few employees, the brunt of its reporting burden and excessive penalties will be shouldered by law-abiding, Main Street businesses.”

Last month, the U.S. District Court for the Northern District of Alabama ruled the CTA is unconstitutional, but the resulting injunction applied only to the plaintiffs in that case who are members of the National Small Business Association. All other covered entities are still required to file their reports by the end of 2024 unless Congress, or another court, acts.

Rep. Davidson’s bill would repeal the CTA and give Congress the opportunity to craft a better approach that addresses U.S. national security concerns while balancing them with the interests and rights of law-abiding small business owners.