OAKLAND — California Attorney General Rob Bonta joined a coalition of 21 attorneys general in filing a lawsuit against the Treasury Department's Financial Crimes Enforcement Network (FinCEN) on Tuesday. The complaint was filed in the U.S. District Court for the District of Oregon and challenges FinCEN rulemaking regarding the Corporate Transparency Act.

FinCEN's new rule permanently removes Beneficial Ownership Information (BOI) reporting requirements for U.S. companies and U.S. persons. The regulation also exempts foreign companies from the requirement to report any U.S. persons who are beneficial owners, and FinCEN commits to deleting all information previously reported by U.S. companies and individuals under the BOI requirements. The agency claims that collecting information from these entities does not serve the public interest.

The lawsuit alleges that FinCEN's new rule is in excess of statutory authority, contrary to law, and arbitrary and capricious, in violation of the Administrative Procedure Act and the U.S. Constitution. The attorneys general said the deleted records likely include evidence of unsolved crimes. They also said states will be unable to use BOI data to enforce compliance with state tax laws, thereby depriving states of tax revenues.

"The Trump Administration is unlawfully rolling back reporting requirements meant to help law enforcement track down bad actors who hide financial assets in shell companies," Bonta said. "These anonymous accounts are often used for illegal activity — like by cartels and criminals to money launder, traffic drugs, or to hide bribes or illegal kickbacks." The attorneys general joining the lawsuit represent Arizona, Colorado, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Rhode Island, Virginia, Washington, Wisconsin, Illinois, and Oregon. The Corporate Transparency Act requires beneficial owners to submit their names, addresses, birth dates, and identification records to FinCEN.