WASHINGTON – A House committee voted Tuesday to advance a bill that would erase a federal requirement for American business owners to report their true identities to the government.
The House Financial Services Committee voted 26 to 25 to repeal the Corporate Transparency Act, a 2020 anti-money laundering law. The bill, known as the Repealing Big Brother Overreach Act, has strong Republican backing and 191 co-sponsors. The vote fell largely along party lines.
The proposed replacement would exempt U.S. citizens operating domestic businesses from reporting their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network. Foreign nationals would still have to file those disclosures.
The committee’s action would codify changes the Trump administration already put in place last year. In March 2025, the Treasury Department issued an interim rule halting enforcement of the law for domestic companies. That rule cut the number of required filers from an estimated 32 million to roughly 20,000 foreign-owned entities.
The Corporate Transparency Act was passed in December 2020 with bipartisan support. It aimed to stop criminals from using anonymous shell companies to launder money, evade taxes and finance drug trafficking.
Opponents of the repeal said the law is a vital tool for law enforcement.
“Weapons trafficking, human trafficking, terrorism — without this data, prosecutors are left blind when investigating shell companies,” said Representative Stephen Lynch, a Democrat from Massachusetts, during the committee hearing.
The law has been tied up in court for more than a year. A federal judge in Alabama ruled it unconstitutional in 2024. But the 11th Circuit Court of Appeals reversed that decision in December 2025, finding the law was a valid use of Congress’ power to regulate interstate commerce.
Despite that ruling, the Treasury’s interim rule has kept the law largely on hold for American businesses.
The National Small Business Association is asking the Supreme Court to take up the case, calling the law “a profound threat to federalism and individual liberty.” The group argues the reporting requirement is an illegal search under the Fourth Amendment.
The bill now heads to the full House for consideration. Its prospects in the Senate are unclear.