21 attorneys general sue to restore shell-company ownership reporting; Treasury says the exemption relieves small businesses
Twenty states and the District of Columbia sued to overturn FinCEN rules exempting U.S. companies from reporting their owners under the Corporate Transparency Act. The states call it a repeal by rulemaking, and Treasury says it relieves small businesses.
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Published by The Dispute Index editorial teamPublished Updated
Overview
On October 27, 2026, attorneys general for 20 states and the District of Columbia, led by Oregon and Illinois, filed suit in the U.S. District Court for the District of Oregon against the Treasury Department, its Financial Crimes Enforcement Network (FinCEN) and other federal officials. They challenge FinCEN's March 2025 interim final rule and August 2026 final rule, which exempt all domestic companies and U.S. persons from reporting beneficial ownership information. The complaint says the rules exempt over 99.9% of the entities originally required to report and effectively repeal the Corporate Transparency Act, and it asks the court to vacate them and stop a planned purge of reported data. Treasury and FinCEN say the exemption relieves small businesses of burdens that the reports do not justify and that the law lets the Secretary exempt classes of entities.
Read the full background
Congress passed the Corporate Transparency Act in 2021 to require companies to report the people who own or control them to FinCEN, so that law enforcement could trace shell companies used to hide money. On March 2, 2025, Treasury said it would not enforce the reporting rule against U.S. citizens or domestic companies. FinCEN's interim final rule of March 26, 2025, exempted domestic companies, and a final rule published August 14, 2026, made that exemption permanent and extended it to U.S. company applicants. The states' complaint says the final rule also announces that FinCEN will purge existing ownership data for newly exempted entities by February 2027. Foreign companies registered to do business in the United States must still report their non-U.S. owners.
People in this case
Scott BessentDirectly involved
Dan RayfieldDirectly involved
Kwame RaoulDirectly involved
Timeline
4 timeline entries on this page. Dates: March 2, 2025 to October 27, 2026
March 2025
Treasury says it will not enforce ownership reporting against U.S. companies
Treasury announces that it will not enforce beneficial ownership reporting penalties against U.S. citizens or domestic companies and that it will propose narrowing the rule to foreign reporting companies.
[01]U.S. Department of the Treasury
Treasury press release of March 2, 2025, saying it would not enforce beneficial ownership reporting penalties against U.S. citizens or domestic companies and would narrow the rule to foreign companies, with a statement from Treasury Secretary Scott Bessent.
FinCEN's interim rule exempts domestic companies
FinCEN issues an interim final rule that exempts domestic companies from beneficial ownership reporting and keeps the requirement for foreign companies registered to do business in the United States, excluding their U.S. owners.
[02]U.S. Department of the Treasury
FinCEN's final rule, published in the Federal Register on August 14, 2026, adopting its March 2025 interim final rule with changes. It permanently exempts domestic companies and U.S. persons from beneficial ownership reporting under the Corporate Transparency Act and explains the agency's reasons.
FinCEN: Beneficial Ownership Information Reporting Requirement Revision (final rule, 91 FR, Aug. 14, 2026) · U.S. Department of the TreasuryFederal Register document 2026-16576[03]Oregon et al. v. Bessent et al., No. 6:26-cv-02359 (D. Or.): complaint
Complaint filed October 27, 2026, in the U.S. District Court for the District of Oregon by 20 states and the District of Columbia, led by Oregon and Illinois, against the Treasury Department, FinCEN and other federal officials. It asks the court to declare unlawful and vacate FinCEN's 2025 interim final rule and 2026 final rule exempting domestic companies from beneficial ownership reporting, and to block the deletion of information already reported.
August 2026
FinCEN makes the exemption permanent
FinCEN publishes a final rule adopting the interim rule with changes. It permanently exempts domestic companies and U.S. persons from beneficial ownership reporting, and the states' complaint says it announces a purge of existing ownership data for newly exempted entities by February 2027.
[02]U.S. Department of the Treasury
FinCEN's final rule, published in the Federal Register on August 14, 2026, adopting its March 2025 interim final rule with changes. It permanently exempts domestic companies and U.S. persons from beneficial ownership reporting under the Corporate Transparency Act and explains the agency's reasons.
FinCEN: Beneficial Ownership Information Reporting Requirement Revision (final rule, 91 FR, Aug. 14, 2026) · U.S. Department of the TreasuryFederal Register document 2026-16576[03]Oregon et al. v. Bessent et al., No. 6:26-cv-02359 (D. Or.): complaint
Complaint filed October 27, 2026, in the U.S. District Court for the District of Oregon by 20 states and the District of Columbia, led by Oregon and Illinois, against the Treasury Department, FinCEN and other federal officials. It asks the court to declare unlawful and vacate FinCEN's 2025 interim final rule and 2026 final rule exempting domestic companies from beneficial ownership reporting, and to block the deletion of information already reported.
October 2026
Twenty states and the District of Columbia sue in federal court in Oregon
Claim
Attorneys general for 20 states and the District of Columbia, led by Oregon and Illinois, ask the U.S. District Court for the District of Oregon to vacate both rules and stop the data purge, arguing that the executive branch cannot repeal a law by rulemaking.
[03]Oregon et al. v. Bessent et al., No. 6:26-cv-02359 (D. Or.): complaint
Complaint filed October 27, 2026, in the U.S. District Court for the District of Oregon by 20 states and the District of Columbia, led by Oregon and Illinois, against the Treasury Department, FinCEN and other federal officials. It asks the court to declare unlawful and vacate FinCEN's 2025 interim final rule and 2026 final rule exempting domestic companies from beneficial ownership reporting, and to block the deletion of information already reported.
[04]New York Attorney General: Attorney General James Sues to Stop Federal Policy Shielding Criminals' Finances
Press release from New York Attorney General Letitia James announcing that New York joined the coalition suing over the Treasury rule, with her statement.
[05]California Attorney General: Attorney General Bonta Sues Trump Administration for Rolling Back Financial Crime Enforcement
Press release from California Attorney General Rob Bonta announcing that California joined the coalition suing over FinCEN's rule, with his statement.
Response record
Responses
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2 matching responses. Newest first.
U.S. Department of the TreasuryFinancial Crimes Enforcement Network, a Treasury bureau, in its final ruleDirectly involvedBefore this statement
FinCEN says it solicited comments from the public on the interim rule and said it would assess the rule's effect in light of the comments it received.
"The IFR's changes relieved U.S. small businesses of burdens imposed by the Reporting Rule, which the Secretary determined were not justified by the usefulness of the reports generated and the information they made available."
Defended or excusedCase context: 21 attorneys general sue to restore shell-company ownership reporting; Treasury says the exemption relieves small businesses
Full statement and sources
In its final rule, FinCEN says the interim rule relieved U.S. small businesses of reporting burdens that the Treasury Secretary determined were not justified by the usefulness of the reports and the information they made available.
After the statement
The rule says this determination was consistent with the Corporate Transparency Act, which it says directs the Secretary to minimize burdens on reporting companies.
FinCEN: Beneficial Ownership Information Reporting Requirement Revision (final rule, 91 FR, Aug. 14, 2026) · U.S. Department of the TreasuryFederal Register document 2026-16576Why this label?
The case concerns the Treasury rules exempting domestic companies from beneficial ownership reporting. FinCEN says the exemption relieved small businesses of burdens the reports did not justify, which defends the policy under scrutiny.
This label describes the statement's response within the context above.
Scott BessentSecretary of the Treasury, in a Treasury press releaseDirectly involvedBefore this statement
Treasury announced that it would not enforce beneficial ownership reporting penalties against U.S. citizens or domestic companies and would narrow the rule to foreign reporting companies. Bessent called the move a victory for common sense.
"Today's action is part of President Trump's bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy."
Defended or excusedCase context: 21 attorneys general sue to restore shell-company ownership reporting; Treasury says the exemption relieves small businesses
Full statement and sources
Treasury Secretary Scott Bessent says Treasury's decision not to enforce beneficial ownership reporting against U.S. citizens and domestic companies is part of President Trump's agenda of reining in burdensome regulations, in particular for small businesses.
After the statement
In the same release, Treasury says it will issue a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.
Why this label?
The case concerns the Treasury rules exempting domestic companies from beneficial ownership reporting. Bessent presents the step that led to those rules as relief from burdensome regulation for small businesses, which defends the policy under scrutiny.
This label describes the statement's response within the context above.
Sources
(5)
Original text
Oregon et al. v. Bessent et al., No. 6:26-cv-02359 (D. Or.): complaint
Relevant passage: ECF No. 1
About this source
Complaint filed October 27, 2026, in the U.S. District Court for the District of Oregon by 20 states and the District of Columbia, led by Oregon and Illinois, against the Treasury Department, FinCEN and other federal officials. It asks the court to declare unlawful and vacate FinCEN's 2025 interim final rule and 2026 final rule exempting domestic companies from beneficial ownership reporting, and to block the deletion of information already reported.
- Author
- Attorneys general of 20 states and the District of Columbia
- Published
- Accessed
Official statement
U.S. Treasury: Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies
About this source
Treasury press release of March 2, 2025, saying it would not enforce beneficial ownership reporting penalties against U.S. citizens or domestic companies and would narrow the rule to foreign companies, with a statement from Treasury Secretary Scott Bessent.
- Author
- U.S. Department of the Treasury
- Published
- Accessed
Original text
FinCEN: Beneficial Ownership Information Reporting Requirement Revision (final rule, 91 FR, Aug. 14, 2026)
Relevant passage: Federal Register document 2026-16576
About this source
FinCEN's final rule, published in the Federal Register on August 14, 2026, adopting its March 2025 interim final rule with changes. It permanently exempts domestic companies and U.S. persons from beneficial ownership reporting under the Corporate Transparency Act and explains the agency's reasons.
- Author
- Financial Crimes Enforcement Network
- Published
- Accessed
Official statement
California Attorney General: Attorney General Bonta Sues Trump Administration for Rolling Back Financial Crime Enforcement
About this source
Press release from California Attorney General Rob Bonta announcing that California joined the coalition suing over FinCEN's rule, with his statement.
- Author
- Office of the California Attorney General
- Published
- Accessed
Official statement
New York Attorney General: Attorney General James Sues to Stop Federal Policy Shielding Criminals' Finances
About this source
Press release from New York Attorney General Letitia James announcing that New York joined the coalition suing over the Treasury rule, with her statement.
- Author
- Office of the New York Attorney General
- Published
- Accessed
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- Publisher
- The Dispute Index
- Title
- 21 attorneys general sue to restore shell-company ownership reporting; Treasury says the exemption relieves small businesses
- First published
- Last updated
- Permalink
- https://disputeindex.com/cases/states-sue-treasury-beneficial-ownership-reporting-exemption
The Dispute Index. "21 attorneys general sue to restore shell-company ownership reporting; Treasury says the exemption relieves small businesses". First published: 2026-10-29. Last updated: 2026-10-29. https://disputeindex.com/cases/states-sue-treasury-beneficial-ownership-reporting-exemption