State attorneys general led by Oregon and Illinois sued the Treasury Department over its rule exempting US companies from reporting who really owns them, asking a federal court to overturn the rule and block the planned deletion of previously reported ownership data.
State attorneys general led by Oregon's Dan Rayfield and Illinois' Kwame Raoul filed suit on 27 October in the US District Court in Eugene, Oregon, challenging the Treasury Department's rule exempting US companies and individuals from reporting beneficial ownership information. The case, State of Oregon v. Bessent, names Treasury Secretary Scott Bessent, the Treasury Department and its Financial Crimes Enforcement Network, FinCEN, as defendants, and also lists the heads of the Justice and Homeland Security departments.
The lawsuit targets a rule FinCEN finalised in August that exempted US companies and US owners of foreign companies from filing under the 2021 Corporate Transparency Act. The states say FinCEN first exempted 99.9% of businesses from the requirements in an interim rule on 26 March 2025, then made those exemptions permanent on 14 August, and committed to deleting, by 10 February 2027, ownership information previously reported by companies and people no longer required to report. They argue the rule violates the Administrative Procedure Act, the separation of powers and the constitutional duty to take care that laws are faithfully executed, acted arbitrarily and without reasonable explanation, and was made without properly consulting the Secretary of Homeland Security and the US Attorney General. They ask the court to declare the rule unlawful, vacate it, and bar FinCEN from carrying out the data purge.
The 2021 law required corporations, limited liability companies and similar entities to report identifying information about their owners to FinCEN, creating a database meant to help police and prosecutors trace illicit money, recover stolen assets and uncover bribes hidden behind anonymous companies. When the rule was finalised in August, Bessent described it as eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising national security. The Treasury Department did not respond to a request for comment on the lawsuit.
The attorneys general's own releases confirm the filing, the Eugene court, the March 2025 and August dates, the February 2027 deletion date and the claims made. Reuters confirms the suit, the 99.9% figure, Bessent's August statement and the lack of a Treasury response. One point could not be settled from the sources: Reuters reports 21 states plus the District of Columbia as plaintiffs, while the Colorado, Washington and New York attorneys general releases name 20 states plus the District, so this story gives no single count and reports the difference rather than choosing between them. The states' claims are allegations in a pending lawsuit, and no ruling has yet been issued.
If the states win, the court would throw out FinCEN's rule and require the agency to keep collecting and maintaining the ownership database for law enforcement investigations. If the rule stands, US companies remain exempt and the previously reported data is slated for deletion in February 2027. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, said in August that rolling back the requirements increased the risks of sanctions evasion, fraud and drug trafficking, as well as sex trafficking and organised criminal activity.
The rule remains in effect unless and until a court blocks it, so the next development will come from the Oregon court as it considers the states' challenge.