A coalition of 21 Democratic state attorneys general has filed a lawsuit to reverse the Trump administration’s decision to scale back the scope of beneficial ownership information reporting requirements.
In August, the Financial Crimes Enforcement Network, which is part of the Treasury Department, finalized a rule removing the requirement for U.S. companies and persons to report BOI to the agency under the Corporate Transparency Act. The agency also announced plans to delete previously reported information from the BOI database.
In a lawsuit filed in Oregon, the attorneys general argued that the Trump administration “cannot repeal a law by rulemaking.” They asked the court to vacate the FinCEN rule, retain previously reported BOI, and order the agency to resume BOI collection.
“Through the CTA, Congress required that both domestic and foreign companies report ownership information to the Treasury Department,” the lawsuit states. “Now, ignoring Congress’s judgment, the Treasury Department has promulgated a regulation that exempts from the law’s ambit all domestic companies — over 99.9% of the entities originally required to report — effectively repealing the act. Neither the Administrative Procedure Act nor the Constitution permits this lawless action. “
