California Attorney General Rob Bonta joined a coalition of 21 attorneys general on Tuesday in a lawsuit against the Treasury Department's Financial Crimes Enforcement Network over its Corporate Transparency Act rule, the California Department of Justice said. The rule permanently removes beneficial ownership information reporting requirements for U.S. companies and U.S. persons. The suit, filed in U.S. District Court for the District of Oregon, alleges the rule exceeds statutory authority, is contrary to law, and is arbitrary and capricious under the Administrative Procedure Act.

The Oregon Department of Justice says Attorney General Dan Rayfield leads the coalition with Illinois Attorney General Kwame Raoul, and that the case was filed in Eugene. Rayfield's office says Congress passed the Corporate Transparency Act with bipartisan support in 2021. It created a Treasury database of business owners that law enforcement can use to trace money and find stolen assets, bribes and political payoffs.

Under the law, beneficial owners submit their names, addresses, birth dates and current identification records, such as a passport or driver's license, to FinCEN, according to Bonta's office. That information is then shared with law enforcement. Bonta's office says the new rule exempts all U.S. companies and individuals from reporting, and also frees foreign companies from reporting any U.S. persons who are beneficial owners. Rayfield's office puts the exemption at 99.9% of businesses.

The rule was issued in August 2026, Oregon's DOJ says. In it, FinCEN also commits to deleting all information previously reported by U.S. companies and individuals, which the states say likely includes evidence of unsolved crimes. The states also argue the agency failed to properly consult the Secretary of Homeland Security and the U.S. Attorney General before granting the exemptions, Rayfield's office says.

Bonta said the rule strips law enforcement of a tool Congress gave it to track bad actors who hide assets in shell companies. His office says California's Department of Financial Protection and Innovation would have had access to the FinCEN data for investigations if not for the rule. If the states win, Rayfield's office says, the court would throw out the rule and require FinCEN to keep collecting and maintaining the ownership database.