The Real Estate Roundtable, along with eleven other national real estate organizations, wrote to the Senate Banking, Housing, and Urban Affairs Committee urging them to advance the Protect Small Business and Prevent Illicit Financial Activity Act (S.3625), which would extend the deadline for companies to report ownership information to the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN).

Corporate Transparency Act (CTA) Delay Bills

• Beneficial ownership regulations that took effect on Jan. 1 under the Corporate Transparency Act (CTA) pose burdensome compliance and material cost challenges for real estate and the small business community.

• The Protect Small Business and Prevent Illicit Financial Activity Act (S.3625), introduced by Banking Committee Ranking Member Tim Scott (R-SC), would extend the deadline for companies to report beneficial ownership information to FinCEN to two years (current regulations require the report within 1 year).

• Additionally, it would prohibit FinCEN from allowing companies to withhold information that would obscure their true owners. (Press Release, Jan. 18)

• “Chinese shell companies cannot be allowed to operate discreetly in the United States – threatening our national security, harming our economy, and stealing sensitive information. At the same time, we must ensure U.S. small businesses have the time necessary to comply with new reporting requirements. This bill makes important changes to do both,” said Ranking Member Scott.

• The bipartisan companion to this legislation (H.R. 5119), introduced by Representatives Zach Nunn (R-IA) and Joyce Beatty (D-OH), passed the House of Representatives by a decisive vote of 420-1 on December 12, 2023.

• The coalition’s letter noted a one-year delay of the CTA’s filing deadline would:
  • Be consistent with congressional intent to give covered entities two years to comply with the CTA’s reporting requirements; and
  • Provide the business community and FinCEN additional time to educate millions of small business owners regarding the new reporting requirements and the onerous penalties resulting from non-compliance.

Roundtable Opposition

• The Roundtable has consistently opposed the beneficial ownership rules, the burdensome reporting requirements, and the negative impact on real estate transactions.  (Coalition letter, April 29)

• “Because there are more real estate partnerships in the U.S. than any other line of business, the beneficial ownership reporting requirements in the CTA have a considerable impact on the industry.  A one-year delay, as called for in S. 3625, would permit businesses much-needed time to fully understand these new reporting requirements,” said Clifton E. (Chip) Rodgers, Jr., Roundtable Senior Vice President.

• The Roundtable also joined more than 120 other national business organizations in a March 19 letter that urged Senate Banking Committee leaders to support a one-year filing delay for the new CTA beneficial ownership regulation requirements.

The Roundtable’s Real Estate Capital Advisory Committee (RECPAC) will continue to monitor developments related to beneficial ownership requirements and legal outcomes.