AMAC opposes new reporting burdens for small businesses that could put them at risk for punitive measures for non-compliance.
August 12, 2020
The Honorable James Inhofe
Chairman
U.S. Senate Committee on Armed Services
228 Russell Senate Office Building
Washington, DC 20510
The Honorable Adam Smith
Chairman
U.S. House Committee on Armed Services
2216 Rayburn House Office Building
Washington, DC 20515
The Honorable Jack Reed
Ranking Member
U.S. Senate Committee on Armed Services
228 Russell Senate Office Building
Washington, DC 20510
The Honorable Mac Thornberry
Ranking Member
U.S. House Committee on Armed Services
2216 Rayburn House Office Building
Washington, DC 20515
Dear Chairman Inhofe, Chairman Smith, Ranking Member Reed, and Ranking Member Thornberry,
As you begin conference discussions on the Fiscal Year 2021 National Defense Authorization Act, the undersigned small business organizations urge you to exclude non-germane provisions that would burden small businesses with new beneficial ownership reporting requirements through the creation of a federal registry. During Main Street’s most significant economic and public health crisis in generations, now is not the time to kick small business owners while they are down and target the smallest businesses in America with a new, permanent reporting requirement that compromises the privacy of law-abiding small business owners.
The House passed H.R. 6395, the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, contained an amendment offered by Representative Carolyn Maloney that incorporated the text of H.R. 2513, the Corporate Transparency Act of 2019. This unrelated amendment was grouped with 154 other amendments within a massive en-bloc amendment that received only one minute of debate. In the Senate, Senators Crapo and Brown submitted a similar amendment, Senate Amendment 2198 to S. 4049, the National Defense Authorization Act for Fiscal Year 2021, but ultimately, the amendment was excluded from the legislation.
The amendments are structured similarly and would require millions of small businesses, nearly every employer with 20 or fewer employees, to register their personally identifiable ownership information with the Financial Crimes Enforcement Network (FinCEN) at the Department of Treasury and update that information periodically for the life of the business. Willful failure to provide completed and updated paperwork could result in significant fines and imprisonment. These amendments seek to transfer a substantial regulatory requirement, FinCEN’s Customer Due Diligence Rule, from financial institutions to the smallest businesses in America.
Not only would these amendments burden small business owners, but they would also decrease privacy protections. Under current law, the beneficial ownership information of small business owners is held securely by financial institutions and can only be accessed by law enforcement via a judicial subpoena or warrant. This requirement would be eliminated by these amendments and thousands of law enforcement and intelligence officials, including foreign governments, would be able to access this information via requests through undefined protocols.
These amendments will slow the economic recovery of Main Street and neither should be included in the Fiscal Year 2021 National Defense Authorization Act conference report.
