04/02/2025
FinCEN Eliminates BOI Reporting Requirements for U.S. Companies
March 25, 2025 (ALTA article)
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The Financial Crimes Enforcement Network (FinCEN) issued an interim final rule that removes the requirement for U.S. companies and persons to report beneficial ownership information to the agency under the Corporate Transparency Act.
The issuance of the interim final rule is consistent with an announcement by the Treasury Department on March 3 that it would not enforce any penalties or fines associated with the BOI reporting rule.
In the interim final rule, FinCEN revised the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”).
Most title companies were already exempt from this reporting requirement due to the rule’s exemption for state licensed insurance producers.
FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.
Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under new deadlines. These foreign entities, however, will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.
Upon the publication of the interim final rule, the following deadlines apply for foreign entities that are reporting companies:
Reporting companies registered to do business in the United States before the date of publication of the IFR must file BOI reports no later than 30 days from that date.
Reporting companies registered to do business in the United States on or after the date of publication of the IFR have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.
FinCEN is accepting comments on this interim final rule and intends to finalize the rule this year.
The Treasury and FinCEN could face legal challenges in its effort to alter the law. Generally, it’s viewed as an abuse of power when an agency issues a rule that is inconsistent with its authorizing act. While courts have held that regulators can impose additional or more specific requirements, they may not generally add to, detract from or modify the statute.
The Treasury’s announcement could still impact the title and settlement services industry as it works to prepare for the anti-money laundering (AML) regulations for residential real estate transfers. This rule, which goes into effect Dec. 1, 2025, requires real estate professionals to submit reports and keep records about certain high-risk, non-financed transfers of residential real property to specified legal entities and trusts.
Over the past few years, ALTA has worked with allies in Congress and FinCEN to try to narrow the scope of the AML rule. While this interim final rule for BOI reporting doesn’t directly affect the AML rule, it could impact ALTA’s ability to obtain further relief for the industry either because Treasury is more open to changes or because the data provided by settlement agents under the rule becomes more valuable.
