Editor’s note: This column was included in the Dec. 12 version of The Pulse, a weekly BankBeat newsletter sent to subscribers.
As one of millions of small business owners in this country, I say “thank you” to the Federal district court judge in Texas who, on Dec. 3, issued a nationwide injunction halting a requirement for people like me to register business ownership information with a department of the U.S. Treasury. Thank you, judge!
I know it is only one form, and that the Corporate Transparency Act only required small business owners to register once, not annually, but as a guy trying to run a 10-person company, I can tell you that every form matters. Every bureaucratic obligation takes away from the ability of my team and me to do what our customers pay us to do.
I’ve known about the obligation to register for months, but like a third of all applicable businesses, I was waiting until the Jan. 1, 2025 deadline to respond. Why have so many people put off complying? Because we don’t have time to deal with new forms that in no way make our business better or our customers happier. Plus, I really don’t understand why the Financial Crimes Enforcement Network can’t get the information it needs from its sister organization, the IRS — both are divisions of the U.S. Treasury Department.
Plus, it feels somewhat invasive to have another federal agency collecting information from my company, solely to monitor my activity for clues about money laundering or other financial crimes. Various organizations already are collecting all our location and calling data from our cellphone activity; forgive me if I can’t get too excited about revealing even more data about my activities to folks who say they are trying to protect me and my colleagues.
Banks, along with other kinds of companies — those with more than 20 employees or annual revenue in excess of $5 million — were exempt from the requirement all along, but I invite community bankers to share my joy. Small companies like NFR Communications, which publishes this newsletter, rely on community banks and we make up an important component of your customer base. Useless requirements that needlessly impede our ability to do our jobs weaken the small business economy and the community bank ecosystem.