HFS Chair Patrick McHenry Demands Delay to Effective Date for FinCEN BOI Rule

Representative Patrick McHenry, Chair of the House Financial Services Committee, demanded a delay to the January 1, 2024 effective date for FinCEN's final rule on the reporting of beneficial ownership information ("BOI").

Citing numerous actions taken by legislators raising many concerns, Chair McHenry argued that the final rule was duplicative, complicated, inadequate as to data security and overly burdensome to small businesses.

As to data security concerns, Chair McHenry explained that "the Corporate Transparency Act requires state, local and tribal law enforcement to obtain a court order, by a Court of competent jurisdiction, prior to accessing the BOI database... [but the] final Access Rule lowers the threshold to 'Court Authorization,' which is not in line with the intent of Congress and increases the risk of unauthorized disclosures." He added that "instead of following this established framework, FinCEN opted to reinvent the wheel and establish a new, overly complex regime."

As to the impact on small business, he warned that the new requirements expose additional legal risks for small businesses that are in many cases not even aware of the new requirements.