FinCEN to Destroy Sensitive Small Business Ownership Data Following Congressional Pressure

In a major win for small business owners, the Financial Crimes Enforcement Network (FinCEN) has announced plans to destroy sensitive Beneficial Ownership Information (BOI) previously collected under the Corporate Transparency Act (CTA). The move comes in response to mounting pressure from lawmakers and small business advocates concerned about data privacy and security.

Millions of small business owners were required to submit personal ownership information under the threat of steep penalties—up to two years in jail and $10,000 in fines. This mandate applied to businesses with fewer than 20 employees and less than $5 million in annual revenue, sparking widespread criticism over privacy risks and regulatory overreach.

The announcement followed swift congressional action, led by Sen. Jim Banks, Rep. Warren Davidson, and a coalition of 85 lawmakers who urged FinCEN to destroy already-collected data and finalize a rule exempting small businesses from future reporting requirements.

Since the CTA’s passage in 2021, the National Federation of Independent Business (NFIB) has made repealing the beneficial ownership mandate a top priority. Critics have pointed to serious cybersecurity vulnerabilities in the new federal database, which houses sensitive personal data from millions of small business owners.

Thanks to sustained advocacy from small business leaders and supportive lawmakers, FinCEN is now taking steps to eliminate this risk. Owners are calling for not only the destruction of their data but also a full repeal of the Corporate Transparency Act to prevent further regulatory burdens.