NFIB, the voice of small business, is leading a coalition of 63 small business groups to urge Congress to defeat a so-called “beneficial ownership” mandate.
This mandate, which would subject nearly 5 million of America’s smallest businesses to higher costs and endanger their privacy, is under consideration as part of the National Defense Authorization Act. The act is currently in conference discussions between the U.S. Senate and House of Representatives.
The NFIB-led coalition recently sent a letter to leaders in both parties urging the mandate’s defeat.
As the letter says, “Not only would these amendments burden small business owners, but they would also decrease privacy protections.”
Read the coalition letter to Congress here.
If the mandate is enacted, small businesses with 20 or fewer employees would be forced to complete and submit annual paperwork which includes the personally identifiable information of each business owner to the Treasury Department’s Financial Crimes Enforcement Network. Failure to comply would be a federal crime with civil penalties up to $10,000 and criminal penalties of up to three years in prison.
An NFIB study has found that a beneficial ownership mandate would cost small businesses $5.7 billion in new regulatory costs and add an additional 131.7 million hours of paperwork.
“Small businesses are already struggling to recover during this unprecedented public health crisis. Now is not the time to kick small businesses while they are down,” said Kevin Kuhlman, NFIB’s Vice President of Federal Government Relations. “There is never a need to treat small business owners like criminals and threaten them with sky-high fines and jail time – and doing so in a defense bill is especially bad.”
NFIB previously led the charge to defeat the beneficial ownership mandate when it was a standalone bill in 2019. NFIB considers the Corporate Transparency Act to be an NFIB Key Vote for the 116th Congress.
The NFIB-led coalition letter also notes that “Under current law, the beneficial ownership information of small business owners is held securely by financial institutions and can only be accessed by law enforcement via a judicial subpoena or warrant. This requirement would be eliminated by these amendments and thousands of law enforcement and intelligence officials, including foreign governments, would be able to access this information via requests through undefined protocols.”
The letter concludes by noting that such a mandate would “slow the economic recovery of Main Street and neither should be included in the Fiscal Year 2021 National Defense Authorization Act conference report.”
NFIB will continue to lead the fight against the beneficial ownership mandate and all policies that threaten the recovery and success of America’s small businesses.
To read more on NFIB’s efforts to protect small business privacy, visit https://nfib.com/protectprivacy.