Yesterday, the House Rules Committee declined to make in order an amendment to the National Defense Authorization Act (NDAA) that would have protected Main Street businesses from the CTA’s burdensome beneficial ownership reporting requirements. The amendment, led by Representatives Warren Davidson and Michelle Fischbach, was ultimately left out of the 312 amendments made in order for floor consideration.
Apparently, Rules was concerned that the amendment was not germane to the defense bill. That’s odd, given the CTA originally became law by riding on the NDAA back in 2020.
The decision also came despite more than 60 trades, including the S Corporation Association, strongly urging congressional leaders to include the language in this year’s NDAA. As their letter reads:
The Administration’s deregulatory agenda has removed a significant layer of uncertainty and red tape from the economy…One such regulation is the burdensome and unconstitutional beneficial ownership information (BOI) reporting mandate for 32.6 million small businesses. In March of 2025, Treasury exempted over 32 million American businesses from the reporting mandate. This action was the largest deregulatory action of 2025, saving small businesses from over $128 billion of regulatory costs and compliance burdens. This deregulatory action was monumental. However, over 32 million American small businesses fear this $128 billion regulation will come back under a future Administration. If BOI is reimposed, the significant penalties for small businesses, up to a $10,000 fine and two years in prison will be back in effect.
We are grateful for this victory, but this victory is only temporary. The fight is not over. We urgently ask that the House and Senate prioritize legislation to lock in the $128 billion of regulatory savings. This can be done through full BOI repeal, which has 34 Senate cosponsors (S. 100) and 194 House cosponsors (H.R. 425), or through language to codify Treasury’s interim final rule from March 2025 exempting U.S. businesses from BOI and destroying the BOI of the millions of American small businesses who registered with FinCEN but are no longer required to file.
The codification legislation has already passed the House Financial Services Committee. Now, it must be included in must-pass legislation like the National Defense Authorization Act (NDAA), which is how the invasive BOI mandate became law in 2021. Small businesses believe that just as Congress created the BOI mess through the NDAA, Congress can also clean up their mess through the NDAA.
This wasn’t a fringe effort. The amendment attracted nearly 40 House cosponsors, and dozens of national trades called for inclusion of the amendment.
Nor has opposition to the CTA been confined to one party. Once lawmakers fully understood the scope of the reporting mandate, bipartisan concern followed. Last Congress, the House unanimously passed legislation sponsored by Representatives Joyce Beatty (D) and Zach Nunn (R) delaying implementation of the reporting requirements by a full year. Democrats and Republicans alike recognized that requiring millions of family businesses to file ownership CTA reports under threat of criminal penalties was a far cry from the narrow anti-money laundering tool many had envisioned.
The House setback is disappointing, but it is hardly the end of the story. Attention now shifts to the Senate, where Senator John Kennedy has introduced legislation to codify Treasury’s exemption and require the deletion of previously collected BOI data, while Senator Tommy Tuberville continues to press for full repeal of the CTA. Both proposals could be considered when the Senate takes up its version of the NDAA.
The fight also continues in the courts. The National Small Business Association and the National Federation of Independent Business have each petitioned the Supreme Court to review their respective challenges to the CTA. Those petitions present the Court with an opportunity to rule that Congress exceeded its constitutional authority by compelling millions of small businesses and other legal entities to report their beneficial ownership information to the federal government.
Finally, final rules codifying the Administration’s roll-back of the CTA are pending before the Office of Management and Budget, promising that we will get final rules on the newly limited CTA in short order, hopefully coupled with the purging of existing database, as promised.
So for now, one step back and one step forward, with several tentative steps to come. It’s a strange dance, but then the CTA is a strange law. For our Senate friends, if the NDAA was an appropriate vehicle to create the Corporate Transparency Act, it ought to be an appropriate vehicle to fix it.