Trump Rule Ends BOI Mandate for U.S. Small Businesses

The Trump administration has finalized a rule shielding more than 32 million American businesses from a federal mandate requiring them to disclose personal ownership information to the government.

The National Federation of Independent Business (NFIB) praised the move this week, calling it a major victory for small business owners in Alabama and across the country.

The rule, finalized by the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) exempts companies formed in the United States and U.S. citizens from the Beneficial Ownership Information reporting requirements of the Corporate Transparency Act. Foreign companies registered to do business in the United States remain subject to more limited reporting rules.

The administration's action makes permanent, at the regulatory level, a policy first put in place in March 2025. At that time, FinCEN issued an interim rule that removed domestic companies from the definition of a "reporting company."

The original BOI rule grew out of the Corporate Transparency Act, which Congress enacted as part of the National Defense Authorization Act for Fiscal Year 2021. The law was aimed at making it harder for criminals to hide behind anonymous shell companies. FinCEN's original rules required covered companies to disclose identifying information about the people who owned or controlled them.

That information could include an owner's name, date of birth, home address and identifying information from a driver's license, passport or other government ID. FinCEN also required an image of the identification document.

Small business groups fought the mandate for years, arguing that it placed a costly burden on millions of law-abiding companies while creating a federal database filled with sensitive personal information.

NFIB estimates that exempting American businesses from the rule saves them more than $128 billion in compliance and regulatory costs. The group says more than 32 million small businesses could again face the mandate if a future administration reverses the regulatory exemption.

The final rule also addresses another long-running concern for NFIB: what happens to information already handed over to the government.

FinCEN previously announced plans to destroy BOI data collected from U.S. small businesses. NFIB had pressed the agency to delete the information, arguing that owners submitted sensitive data while facing the prospect of fines and criminal penalties for failing to comply.

For Alabama small business advocates, the final rule is welcome news — but they say the dispute is not finished.

“The BOI mandate placed an unfair burden on millions of law-abiding small business owners throughout Alabama and across the country,” NFIB Alabama State Director Rosemary Elebash said. “We thank the Trump administration for ending the reporting requirement and protecting the personal data of business owners. Congress should finish the job by permanently repealing the law.”

Until that is done, the Corporate Transparency Act itself remains federal law. The Trump administration changed how Treasury defines the businesses subject to its reporting requirements, but Congress has not repealed the underlying statute. The law still directs reporting companies to provide beneficial ownership information to FinCEN.

That leaves open the possibility that a later administration could seek to rewrite the regulations and revive reporting requirements for domestic businesses.

NFIB is therefore pressing Congress to repeal the BOI mandate outright, which would make the protection for American businesses far more difficult for a future administration to undo. The organization has made permanent repeal and destruction of previously collected data a focus of its lobbying campaign in Washington.

The administration argues that the new approach strikes a balance between fighting financial crime and protecting legitimate American businesses from needless federal paperwork.

Treasury Secretary Scott Bessent said when the domestic exemption was first announced that the department was reviewing regulations to reduce burdens on taxpayers and small businesses while pursuing the administration's economic agenda.

Critics of the rollback disagree. They argue that beneficial ownership records give law enforcement an important tool for tracing shell companies used for money laundering, sanctions evasion, fraud and other crimes. FinCEN itself made that case when it adopted the original reporting rule in 2022.

For now, however, U.S.-created companies and their American owners do not have to file BOI reports with FinCEN.

NFIB wants Congress to make sure it stays that way.