21 State Attorneys General Challenge Treasury Rule Cutting Corporate Ownership Reporting

A group of 21 state attorneys general filed a lawsuit on Tuesday in the U.S. District Court for the District of Oregon, targeting a Treasury Department rule that would exempt many companies from reporting who owns or controls them.

The attorneys general say the rule, issued by the Financial Crimes Enforcement Network (FinCEN) on March 21, 2025, conflicts with the Corporate Transparency Act (CTA) and exceeds the agency’s authority.

What the Treasury Rule Changes

Under the CTA, which took effect on Jan. 1, 2024, FinCEN must collect “beneficial ownership information” for corporations and other entities, especially those that use complex structures or shell companies. The new interim final rule eliminates reporting for all domestic companies and for U.S. owners of foreign entities, and it would delete previously gathered records.

Legal Arguments from the States

The states argue the rule is “arbitrary and capricious” under the Administrative Procedure Act and that it violates the Constitution’s Take Care Clause by planning to purge existing data. They also claim the Treasury lacks authority to repeal a congressional mandate through rulemaking.

Potential Impact on Ordinary People

If the rule stands, many businesses—including small firms that form corporations—would no longer need to disclose owners, making it harder for law‑enforcement to trace illicit activity such as money laundering or drug trafficking. Consumers and small‑business owners could see less transparency in who controls the companies they deal with. The lawsuit seeks to have the interim and final rules declared unlawful, to stop the data purge, and to keep ownership reporting in place.

Next Steps and What You Can Do

The case will proceed in federal court, and the states are asking the judge to block the rule while the lawsuit is decided. While no immediate deadline is set for businesses, anyone concerned about the transparency of a company they work with should retain any ownership documents they have and monitor news for the court’s decision. If you rely on corporate transparency for due‑diligence, consider consulting a lawyer to understand how a change in reporting could affect your risk assessments.

Talking to an attorney can help you evaluate whether you need to adjust contracts, compliance programs, or investigative practices in light of the pending litigation.

This article is general information based on Courthouse News Service and court or agency records available at publication time. It is not legal advice; laws and deadlines differ by state and by case. Published October 28, 2026.