On March 2, the U.S. Department of Treasury announced that it will not enforce the Corporate Transparency Act (CTA) and any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines. 

In addition, the Treasury announced that it will issue a notice of proposed rulemaking that will narrow the rule's scope to foreign reporting companies only. 

While the Big “I" successfully secured an exemption for insurance producing entities, many small businesses were not so fortunate and were preparing to comply with CTA requirements, which were scheduled to go into effect March 21. That reporting deadline had been delayed numerous times, creating significant confusion. 

Data released by the Treasury's Financial Crimes Enforcement Network (FinCEN) and the National Federation of Independent Business (NFIB) estimated that CTA compliance of this new regulation would have cost an estimated 32.6 billion small businesses a staggering $22.7 billion in its first year and an additional $5.6 billion per year moving forward. 

Without an exemption for independent insurance agencies, the beneficial ownership provision would have required agencies with fewer than 20 employees to file new reports on their beneficial ownership with FinCEN. 

When FinCEN released its final rule, it adopted the insurance-producer exemption. FinCEN specifically cited that it was persuaded by the arguments made by the Big “I" that this limitation did not advance the policy underlying this exemption and risked unduly burdening certain insurance producers.

Raaed Haddad is Big “I" director of federal government affairs.