Michigan Attorney General Dana Nessel has joined a coalition of 20 states and the District of Columbia in filing a lawsuit to stop the Trump administration from exempting nearly all businesses from compliance with the federal Corporate Transparency Act. That law, passed with bipartisan support in 2021, created a U.S. Department of Treasury database of business owners that law enforcement can use to trace suspect money, track down stolen assets, and uncover bribes and political payoffs. The Act requires businesses to tell the federal government who owns and controls them, though the Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN, has newly exempted 99.9% of businesses from compliance with the law.
In August 2026, the Trump administration issued a rule exempting nearly every business from reporting. Then FinCEN went further, announcing it would delete the ownership information already in the database, records that likely include evidence of unsolved crimes. The coalition plaintiff states argue that would break multiple federal laws.
“If this administration is allowed to gut the Corporate Transparency Act and erase important records, a critical safeguard against financial misconduct will be stripped away,” said Nessel. “The federal government doesn't get to circumvent a law it no longer wishes to enforce. We join this action to send the message that companies guilty of committing corruption, financial crimes and fraud will not get a free pass.”
In their lawsuit, the states allege FinCEN violated the Corporate Transparency Act and Administrative Procedure Act, skipped required legal steps before changing the rule, acted arbitrarily and without a reasonable explanation, and failed to properly consult the Secretary of Homeland Security and the U.S. Attorney General before exempting nearly all businesses.
The states ask the court to reject FinCEN’s rule and require the agency to keep collecting and maintaining the ownership database for law enforcement.
Also joining the lawsuit are the attorneys general of Arizona, California, Colorado, Delaware, the District of Columbia, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Virginia, Washington, Washington, and Wisconsin.
In August 2026, the Trump administration issued a rule exempting nearly every business from reporting. Then FinCEN went further, announcing it would delete the ownership information already in the database, records that likely include evidence of unsolved crimes. The coalition plaintiff states argue that would break multiple federal laws.
“If this administration is allowed to gut the Corporate Transparency Act and erase important records, a critical safeguard against financial misconduct will be stripped away,” said Nessel. “The federal government doesn't get to circumvent a law it no longer wishes to enforce. We join this action to send the message that companies guilty of committing corruption, financial crimes and fraud will not get a free pass.”
In their lawsuit, the states allege FinCEN violated the Corporate Transparency Act and Administrative Procedure Act, skipped required legal steps before changing the rule, acted arbitrarily and without a reasonable explanation, and failed to properly consult the Secretary of Homeland Security and the U.S. Attorney General before exempting nearly all businesses.
The states ask the court to reject FinCEN’s rule and require the agency to keep collecting and maintaining the ownership database for law enforcement.
Also joining the lawsuit are the attorneys general of Arizona, California, Colorado, Delaware, the District of Columbia, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Virginia, Washington, Washington, and Wisconsin.
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