The U.S. House Committee on Financial Services approved H.R. 425, also known as the Repealing Big Brother Overreach Act. The bill was passed by a narrow vote of 26 to 25 and sent for further consideration by the House of Representatives.
The bill concerns the beneficial ownership disclosure regime established by the CTA. The Act was adopted in the United States relatively recently, in 2021, amid the spread of beneficial ownership disclosure requirements aimed at combating the use of anonymous companies in money laundering schemes, the financing of criminal activity, and the concealment of illicit assets.
Initially, the CTA required certain categories of companies to disclose information about their beneficial owners for inclusion in a non-public federal database administered by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
However, as early as 2025, FinCEN substantially narrowed the scope of these requirements through agency rules, exempting U.S. individuals and legal entities from the obligation to report beneficial ownership information. The obligation to disclose such data was largely retained for foreign companies registered to do business in the United States.
The U.S. Government Accountability Office (GAO) has already drawn attention to the risks arising from this revision. In a report published in May 2026, GAO noted that the expanded exemption covers more than 99% of the entities that had previously been required to report beneficial ownership information. At the same time, GAO noted that the Department of the Treasury had not identified what measures could be taken to address the resulting gaps in beneficial ownership information.
The H.R. 425 bill now being advanced would effectively codify this approach at the statutory level. According to committee materials, the beneficial ownership disclosure regime would apply only to foreign companies that meet the criteria of a “reporting company” under the CTA.
In addition, the version of the bill approved by the committee provides for the deletion of part of the data previously collected. Within 90 days of the law’s entry into force, FinCEN would be required to remove from its databases information on persons who are not foreign beneficial owners, as well as on companies that would no longer be considered reporting companies.
Supporters of the initiative describe it as a way to reduce the administrative burden on small businesses and limit excessive government data collection. In its press release, the committee describes the bill as a measure to protect Americans’ financial privacy and reduce excessive reporting requirements.
Anti-corruption experts, by contrast, argue that the adoption of H.R. 425 would weaken one of the key tools for combating anonymous companies. Transparency International U.S. (TI US) and the FACT Coalition, in their joint letter to the House Committee on Financial Services, stated that the bill and the amendment approved by the committee would effectively repeal or “hollow out” the CTA.
According to the organizations, even the bill’s stated goal of preserving oversight of foreign participants would not be fully achieved. If a foreign person forms a company directly in the United States, that company would be considered a U.S. company and would not be required to disclose information about its beneficial owners. The requirement would remain only for foreign legal entities already registered to do business in the United States. According to the organizations’ estimate, there are around 12,000 such entities, representing only 0.02% of the companies originally covered by the CTA.
TI US and the FACT Coalition also consider it incorrect to reduce the risks of anonymous company abuse only to foreign participants. In their view, Congress has received sufficient evidence over the years that U.S. companies have also frequently been used in schemes involving fraud, money laundering, and other illegal activity.
In a separate statement, TI US Executive Director Gary Kalman emphasized that weakening the CTA “risks turning the United States back into a place where criminals and foreign adversaries can more easily fund their networks and hide dirty money in plain sight.”