WASHINGTON, DC—Today the House voted to pass HR 2513, the Corporate Transparency Act.

The bill, introduced by Rep. Carolyn Maloney (D-NY) and cosponsored by Reps. Peter King (R-NY) and Gregory Meeks (D-NY), is intended to prevent terrorists and criminals from using shell companies to hide their identities by collecting personal data of owners and investors of businesses with fewer than 20 employees. However, the bill compromises the privacy of small business owners who are inadvertently caught in the bill’s vaguely worded criteria.

Congressman Warren Davidson (R-OH) offered an amendment that would defang the bill and eliminate the Customer Due Diligence Rule, which similarly requires financial institutions to collect consumer data. It would instead empower the Treasury to study alternatives to gather this information through existing databases.

Congressman Davidson remarked after the vote:

"It worries me that my colleagues are so eager to disregard the privacy of small business owners. They aren’t just empowering the government to create another database, they are burdening hard-working Americans with more paperwork so that law enforcement can keep tabs on them without filing charges and without due process.

"I’m also disappointed that we cannot muster support for the most basic protections for Americans’ privacy and civil liberties. This information already exists; the IRS and banks already have this information. Asking business owners to actively participate in the violation of their privacy—under threat of criminal charges, fines, and jail time—is a rejection of liberty in favor of authoritarian control. It will needlessly grow the government and allow it to selectively prosecute more Americans."

Congressman Davidson further offered a motion to recommit as a final opportunity to amend the bill. This motion would have required law enforcement to obtain a court-ordered subpoena to access the data. However, the Democrat majority overwhelmingly voted to pass the bill out of the House.
 

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