Letter Supporting the Protect Small Businesses from Excessive Paperwork Act of 2025 (H.R. 736)

Dear Reps. Nunn, Davids, Emmer, and Davis:

On behalf of the American Bankers Association (ABA), I am writing to express our strong support for H.R. 736, the Protect Small Businesses from Excessive Paperwork Act of 2025. This important bipartisan legislation would extend the Corporate Transparency Act's (CTA) beneficial ownership reporting deadline by one year until January 1, 2026. This extension would allow Treasury's Financial Crimes Enforcement Network (FinCEN) sufficient time to review regulatory implementation of the CTA to ensure that Treasury meets the law's objective of combating illicit finance without unduly burdening banks or small businesses, as Congress directed. In January 2025, Treasury Secretary Scott Bessent committed to reviewing regulatory implementation of the CTA, and the reporting deadline extension included in this bill would provide time for that review.

ABA and its members strongly supported the critical reforms that Congress made to the Bank Secrecy Act (BSA) laws in 2020, which included passing the CTA. For the past 50 years, BSA laws and regulations have been an essential tool to help safeguard the financial system and protect against harms posed by illicit actors. However, during this time, the banking industry has changed dramatically and so have the threats facing our financial system. Criminals, money launderers, and terrorists cannot and should not be able to hide behind shell companies. Congress intended the CTA to provide highly useful information to law enforcement and banks, while also relieving the burden on banks to collect information on their customers for the benefit of law enforcement.

However, flawed implementation threatens the purpose and utility of the CTA. Although the reporting rule went into effect over a year ago, many questions remain unanswered. At this time, FinCEN has only finalized two of the three rulemakings intended to implement the CTA. Banks are still in the dark about what their new regulatory obligations might be, and they remain obligated to collect now-duplicative information, an outcome Congress intended to avoid.

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