MSCI Asks House Speaker To Advance Legislation To Delay Corporate Transparency Act

Last week, the Metals Service Center Institute (MSCI) and nearly 150 other trade organizations submitted a letter to U.S. House Speaker Mike Johnson (R-La.) supporting bipartisan legislation introduced by Rep. Zach Nunn (R-Iowa) that would delay reporting requirements for the Corporate Transparency Act (CTA) for one year.

As Connecting the Dots has reported several times, the CTA requires nearly every U.S. business, about 32 million in all, to report, and to continuously update, information regarding their beneficial owners starting next year. The law includes civil and criminal penalties of up to $10,000 and two years of jail time for failing to report this information. These penalties could apply even in cases that amount to nothing more than a paperwork violation.

MSCI has been working for months to try to roll back these requirements.

The letter, which is available here, argued small businesses would be among those most hurt by the CTA. “The CTA is unique in that it explicitly targets the very companies least equipped to shoulder its regulatory burdens,” the letter noted. “Among its various exemptions, the statute includes a carve out for entities whose revenue exceeds $5 million and which employ more than 20 full-time employees. Companies not meeting those thresholds – essentially every small business currently operating in America today – must comply.”

Although filing under the CTA began at the start of 2024, the federal government has received just 10 percent of required submissions. This low compliance rate can be attributed directly to the general lack of awareness among the small business community when it comes to the new rules.

Given this massive education gap, it is clear additional time is needed for regulators and other stakeholders to continue their outreach to affected small businesses.

While federal courts may ultimately save the day and strike down the CTA for good, Congress cannot wait for that outcome. Rep. Nunn’s delay would allow the legal process to play out and federal regulators additional time to educate businesses about the new law.