U.S. Senate Committee on Banking, Housing and Urban Affairs launches oversight probe into Treasury’s decision to scale back Corporate Transparency Act enforcement

The U.S. Senate Committee on Banking, Housing and Urban Affairs published a minority press release stating that Ranking Member Elizabeth Warren and House Financial Services Committee Ranking Member Maxine Waters have opened an oversight probe by sending a letter to Treasury Secretary Scott Bessent challenging Treasury’s decision to not enforce the bipartisan Corporate Transparency Act (CTA). The lawmakers argue that reduced enforcement of the CTA’s measures against anonymous shell companies is enabling fraud against federal programs and facilitating fentanyl-related illicit finance. The letter cites warnings from the Financial Action Task Force, the Government Accountability Office, the National Narcotic Officers’ Associations’ Coalition, and other experts that rolling back CTA enforcement would facilitate money laundering, federal program fraud, and fentanyl trafficking. It asks whether Treasury has analyzed the national security consequences of refusing to enforce the law and whether Secretary Bessent disputes the views of law enforcement experts across administrations on the need to curb anonymous shell companies, citing “unclassified evidence” of misuse including Sinaloa cartel operatives, Iranian sanctions evaders, and activity linked to technology theft for China’s military. Warren and Waters also referenced a prior inquiry from April and said they will continue oversight of Treasury’s handling of the Corporate Transparency Act in the weeks ahead.