Democrats Demand Treasury Explain Decision to "Gut" the CTA

House and Senate Democrats asked Treasury Secretary Scott Bessent to explain his failure to enforce the bipartisan Corporate Transparency Act ("CTA"). They warned that the decision to halt enforcement of the law threatens U.S. efforts to combat financial crime and protect national security.

In a letter to the Treasury Secretary, Senator Elizabeth Warren, Ranking Member of the Senate Banking Committee, and Representative Maxine Waters, Ranking Member of the House Financial Services Committee, argued that rolling back the law has created a "getaway car" for bad actors despite bipartisan support for transparency. They noted that U.S. officials, from both parties, and international watchdogs stress the importance of beneficial ownership data in combating illicit finance.

The lawmakers argued that weakening the CTA invites greater waste, fraud, and abuse in government programs, while also eroding U.S. leadership in the fight against money laundering and terrorism financing. The lawmakers cited warnings from inspectors general, the Financial Action Task Force, and conservative experts who have raised concerns that cartels and traffickers benefit from opaque corporate structures. The lawmakers also pointed to polling showing overwhelming public support for the CTA and stated that abandoning enforcement leaves the U.S. financial system vulnerable to exploitation.

The lawmakers asked Mr. Bessent to explain by September 26, 2025: (i) what steps he will take to prevent abuse of U.S. shell companies while the CTA remains unenforced; and (ii) whether he rejects the bipartisan consensus that beneficial ownership reporting is vital to protecting the financial system.