Casey Michel put it in two sentences that didn’t need a third. Building the beneficial ownership registry a few years ago was, in his words, the single greatest anti-corruption step the United States had taken in decades. The Trump administration dismantling it, he wrote, is arguably the single greatest pro-corruption step in that same span.
That is not campaign rhetoric. It is a description of what happened this week, and the mechanics of how it happened are worth walking through, because the paper trail runs in a straight, uncomfortable line.
The Corporate Transparency Act passed in 2021 with bipartisan support, part of a defense authorization bill that became law only after Congress overrode a presidential veto of that broader bill. It required most American corporations and LLCs to disclose the real, flesh-and-blood people who own or control them to FinCEN, the Treasury Department’s financial crimes unit, closing a gap that had let anyone form an anonymous shell company in most states with less scrutiny than opening a library card. The first Trump administration praised Congress for passing it. The Financial Action Task Force, the international body that grades countries on anti-money laundering enforcement, had flagged the absence of exactly this kind of registry as one of the fundamental gaps in America’s defenses as far back as 2016. Once the CTA passed, FATF upgraded the United States from non-compliant to largely compliant. The registry fulfilled specific commitments the U.S. made at the 2021 Summit for Democracy and inside its own first formal national strategy on countering corruption. When FinCEN opened the registry to filings under Secretary Janet Yellen, the language used to describe its purpose was direct: stopping oligarchs, kleptocrats, drug traffickers, and human traffickers from hiding behind anonymous shell companies.
This week, Treasury finalized a rule that guts nearly all of it, permanently.
The final rule, issued by FinCEN and effective immediately, exempts every domestic company and every U.S. person from beneficial ownership reporting altogether. Only foreign-formed companies registered to do business in the U.S. still have to disclose their owners, and only their non-U.S. owners at that. On top of ending the reporting requirement going forward, the rule commits FinCEN to actively deleting the ownership data that millions of American companies already filed in good faith, a one-time purge the agency says it intends to complete and not repeat. The rule frames all of this as burden relief for small business, citing an executive order on deregulation and estimating roughly $233,000 in first-year savings from a narrow provision about updating FinCEN identifiers, alongside a claim, carried over from an earlier interim rule, of billions in aggregate compliance savings for companies no longer required to file at all.
Sit with the actual scale mismatch in that math. Treasury’s own filing acknowledges that before this rule took effect, its interim version had already relieved roughly 27.5 million companies of reporting duties since March 2025. The final rule’s own itemized cost-savings table, the one built specifically to justify this action, adds up to a few hundred thousand dollars a year in identified savings from paperwork edge cases. The multi-billion dollar figure Treasury leans on to justify killing the entire program is a number carried over from the earlier interim rule, not new evidence generated to support finalizing it. A federal agency dismantling a national security tool permanently, on the stated basis of protecting small businesses from red tape, produced a rule whose own numbers show the marginal savings from this specific final action are a rounding error against the scale of the program being killed.
The rule’s own text records that FinCEN received 118 comment letters. Forty supported narrowing the requirements. Twenty-eight, including four sitting U.S. senators, law enforcement organizations, and transparency advocacy groups, opposed it outright. A Government Accountability Office report on fraud in federal programs tied specifically to anonymous shell company ownership was cited by commenters warning the rule would make that fraud harder to detect. Treasury’s response, laid out at length in the rule itself, was that the CTA’s own text instructs the Secretary to minimize compliance burden “to the greatest extent practicable,” and that this instruction outweighs the statute’s stated purpose of building a database “highly useful” to law enforcement. That is a genuine, defensible reading of ambiguous statutory language in isolation. It is a much harder argument to sustain against the fact that the same agency spent four years and multiple prior rulemakings explaining, in granular technical detail, exactly why the database it just deleted was highly useful.
The people most likely to notice this shift are the ones least likely to explain it publicly. FATF is scheduled to reevaluate the United States’ anti-money laundering framework again soon, the same evaluation cycle that upgraded the country’s grade specifically because the CTA existed. A downgrade would put the United States in company with jurisdictions flagged for weak controls against exactly the kind of illicit finance this registry was built to expose. Meanwhile, every American company that filed truthful ownership information in 2024 or 2025, trusting that the law required it and that the information would be maintained and used, is now being told that data is being permanently deleted rather than protected, on a timeline FinCEN controls and does not plan to repeat.
None of this required new legislation. Congress built the CTA’s exemption authority broadly enough that a Treasury Secretary willing to certify, with the Attorney General and Homeland Security Secretary’s written concurrence, that domestic beneficial ownership reporting no longer serves the public interest could functionally end the program through rulemaking alone. That is precisely what happened. The legal mechanism is not in dispute. What is worth naming plainly is the gap between the stated justification, paperwork relief measured in the low hundreds of thousands of dollars, and the actual effect, permanently blinding federal law enforcement to the ownership structure of millions of domestic shell companies, deleting records already gathered, and doing so the same year international evaluators were set to check whether the United States had kept the promise this registry represented.
Casey Michel didn’t need a third sentence. The first two already describe exactly what got built, and exactly what just got taken apart.
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