FinCEN–SBA Coordination on Beneficial Ownership Registration Act
- Bill Number
- H.R. 3829
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Commerce
- Status
- Introduced
- Latest Action
- 2025-06-06: Referred to the Committee on Financial Services, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2025-12-05T22:55:01Z
AI-Generated Summary
Purpose
This legislation, titled the "FinCEN-SBA Coordination on Beneficial Ownership Registration Act," aims to improve coordination between the Financial Crimes Enforcement Network (FinCEN, a U.S. Treasury Department bureau that collects financial data to combat crimes like money laundering) and the Small Business Administration (SBA, a federal agency that supports small businesses). It requires these agencies to share information and resources to help small businesses and other entities comply with rules on reporting "beneficial ownership" (true owners of companies, often hidden to enable illegal activities). The goal is to enhance national security, reduce illicit finance, and ease compliance burdens on small businesses as mandated by the existing Corporate Transparency Act (CTA) of 2021.
Key Provisions
- Sense of Congress: Expresses strong support for collecting beneficial ownership information to fight crimes like money laundering, terrorism financing, tax fraud, trafficking, and corruption. It emphasizes the need for federal standards, protection of U.S. security and commerce, alignment with international anti-money laundering rules, and minimizing burdens on small businesses. It highlights the bipartisan passage of the CTA and the importance of its full implementation.
- Definitions: Clarifies terms such as:
- "Beneficial ownership requirements": Rules under U.S. law (31 U.S.C. § 5336) requiring companies to report true owners to FinCEN.
- "Covered information": FinCEN data on these reporting rules.
- "Reporting company": Businesses like corporations or LLCs formed in the U.S. that must file ownership reports (exemptions apply to some large or regulated entities).
- "Resource partner": SBA-supported groups like Small Business Development Centers, Women's Business Centers, and Veteran Business Outreach Centers.
- Other terms cover FinCEN, SBA, and small businesses.
- Memorandum of Understanding (MOU):
- Agencies must meet within 30 days of enactment and sign an MOU within 90 days.
- The MOU outlines joint activities, including:
- Sharing covered information with reporting companies, trade groups, and small business representatives via SBA resource partners.
- Providing info in English, Spanish, and other languages as needed.
- Adding a link on the SBA website homepage to FinCEN's beneficial ownership pages.
- Creating a plan to detect and educate about scams related to ownership reporting.
- Hosting in-person town halls and webinars (organized by SBA offices, featuring FinCEN experts) advertised to affected businesses.
- Using SBA field offices and FinCEN liaisons for these events.
- Any other steps to boost compliance rates.
- The MOU must be publicly posted on both agencies' websites within 7 days.
- Agencies must meet every 6 months (without compensation) to review coordination, compliance challenges, reasons for non-compliance, collaboration strategies, and other issues.
- Reports to Congress: Joint reports every 30 days to key Senate and House committees (Small Business, Financial Services, Banking, Housing, and Urban Affairs). Each report covers:
- Outreach actions in the prior 30 days to non-compliant companies.
- Estimated number of companies helped via the MOU.
- Current compliance numbers.
- Planned actions for the next 30 days.
Significant Changes to Existing Law
This bill does not create new reporting requirements but builds directly on the Corporate Transparency Act (part of the 2021 National Defense Authorization Act). It introduces mandatory collaboration between FinCEN and SBA, which was not explicitly required before, to address implementation gaps. Key additions include timelines for the MOU and reports, anti-scam measures, multilingual outreach, and regular inter-agency reviews—aimed at increasing voluntary compliance without altering core CTA rules on who must report or what information is needed.
Potential Impacts
- Government Agencies: FinCEN and SBA will face new coordination duties, including joint events and reporting, potentially increasing administrative workload but improving efficiency in educating businesses. Resource partners (e.g., development centers) will help disseminate info, expanding their role.
- Citizens and Businesses: Small business owners and other reporting companies (estimated at over 25 million entities) benefit from clearer guidance, scam protections, and accessible support, reducing confusion and penalties for non-compliance (up to $500/day fines under CTA). It minimizes burdens by leveraging SBA's existing network, though initial setup may require some effort from businesses.
- International Relations: Strengthens U.S. compliance with global standards from bodies like the Financial Action Task Force (an international anti-money laundering group), enhancing cooperation with allies on countering illicit finance and corruption. This could improve the U.S. reputation in international financial oversight.
Main Stakeholders Affected
- Primary: Reporting companies, especially small business concerns (e.g., startups, LLCs with fewer than 20 employees and under $5 million in revenue, per SBA definitions).
- Government: FinCEN (leads on financial crime data), SBA (supports small businesses), and their resource partners (e.g., Small Business Development Centers, Women's Business Centers, Veteran Business Outreach Centers).
- Other: Trade associations representing small businesses; congressional committees overseeing financial services and small business issues; law enforcement and intelligence agencies benefiting from better CTA data.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces the CTA's framework without expanding reporting obligations, focusing on education to avoid enforcement-heavy approaches. It promotes voluntary compliance, potentially reducing litigation over CTA burdens (some businesses have challenged it in court). No new penalties are added.
- Constitutional: Aligns with Congress's authority over interstate commerce and national security (e.g., under the Commerce Clause). Privacy concerns from beneficial ownership data are addressed indirectly via anti-scam provisions, but the bill does not alter existing data protections (FinCEN limits access to authorized users).
- Political: References bipartisan CTA support, signaling cross-aisle consensus on anti-crime measures. It could face pushback from business groups wary of regulations but gains favor for aiding small businesses. Enactment would demonstrate commitment to implementing prior laws amid ongoing debates on financial transparency.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Velázquez, Nydia M. [D-NY-7]
Cosponsors (6)
Rep. Waters, Maxine [D-CA-43], Rep. McIver, LaMonica [D-NJ-10], Rep. Williams, Nikema [D-GA-5], Rep. Beatty, Joyce [D-OH-3], Rep. Fields, Cleo [D-LA-6], Rep. Simon, Lateefah [D-CA-12]
Recent Actions
- 2025-06-06: Referred to the Committee on Financial Services, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-06-06: Referred to the Committee on Financial Services, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-06-06: Introduced in House
- 2025-06-06: Introduced in House
Bill Versions
- FinCEN–SBA Coordination on Beneficial Ownership Registration Act — issued 2025-06-06 — PDF (10 pages)