Protect Small Business Privacy

UPDATE: 48 organizations oppose the ILLICIT CASH Act, click here to read the letter. On October 22, 2019, NFIB Key Voted against the Corporate Transparency Act,  click here to read the letter.

Under the Corporate Transparency Act (H.R. 2513) and the ILLICIT CASH Act (S. 2563), small business owners would have to report to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) the beneficial ownership information (which includes the names, dates of birth, addresses, and driver’s license numbers or passport numbers of anyone with a 25% ownership stake in the business or anyone who receives economic assets from the business) in a federal database for the life of the business plus five years and grants broad access to the information to federal, state, local, or tribal law enforcement agencies without a subpoena or warrant.

According to a recent NFIB Research Center study, the Corporate Transparency Act would impose $5.7 billion in compliance costs over ten years/$573 million annually, and 131.7 million hours in new compliance burden over ten years/13.2 million hours annually. The ILLICIT CASH Act would impose a similar initial compliance cost and burden, but the frequency of reporting is different.

The burden of federal paperwork ranks in the top 20 percent of problems small business problems owners encounter. Just over half of small business owners personally handle their businesses’ financial paperwork and record-keeping, and 15 percent of owners delegate those responsibilities to an employee. Time and money spent filing paperwork with the federal government detracts from growing their businesses and creating jobs.

 

Banks currently possess this information for business clients, and it is only accessible through warrant or subpoena. However, the banks and their compliance teams would rather have small business owners provide their information directly to FinCEN without the privacy protection of warrants or subpoenas.

In addition, to the regulatory burden and privacy invasion, the new database of some 25-30 million small business owners could be searched by local, state, and federal law enforcement without a subpoena. The potential for improper disclosure or misuse of the private information increases as the number of people with access to the information increases. The information could be made public.

NFIB opposes the Corporate Transparency Act and the ILLICIT CASH Act, because 80 percent of small business owners opposed Congress requiring small business owners to file paperwork with the Department of Treasury each time they form or change ownership of their businesses.


Urge your legislature to vote NO on the Corporate Transparency Act

Learn how the Corporate Transparency Act affects Small Business

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