Treasury's Deregulation: A Mirage for Small Businesses?

The U.S. Department of the Treasury dropped a bombshell on April 9, 2025, announcing plans to ax 15 rules and guidance materials, with the Internal Revenue Service and Financial Crimes Enforcement Network leading the charge. Treasury Secretary Scott Bessent hailed it as a victory for small businesses, a move to unshackle them from burdensome regulations and unleash prosperity. On the surface, it sounds like a lifeline for the little guy, the Main Street dreamers who keep America humming.

But let’s not kid ourselves. This isn’t a carefully crafted rescue plan; it’s a reckless swing that threatens to unravel the very safeguards small businesses rely on to survive in a cutthroat economy. Deregulation can feel like a breath of fresh air when you’re drowning in red tape, yet this latest push reeks of a different agenda, one that prioritizes quick wins over lasting stability. The reality? Small businesses aren’t begging for a free-for-all; they’re desperate for a system that works for them, not against them.

Treasury’s claiming a $10 billion windfall in first-year savings by scaling back FinCEN’s beneficial ownership reporting rules, a figure that sounds dazzling until you dig deeper. Sure, compliance costs sting, especially for firms scraping by on thin margins. But what’s the trade-off? A financial system more vulnerable to fraud, money laundering, and corruption, risks that hit small businesses hardest when the fallout comes crashing down.

Small businesses create over 62% of new jobs in this country, a fact that’s impossible to ignore. They’re not just the backbone of the economy; they’re the beating heart of communities from coast to coast. Yet, Treasury’s obsession with slashing rules ignores a brutal truth: regulations, when done right, level the playing field. They protect these firms from predatory lending, ensure fair access to capital, and keep financial crime from poisoning the well.

Take the Corporate Transparency Act, a hard-won measure to shine a light on who really owns companies operating here. The recent rollback exempts U.S.-based entities from reporting beneficial ownership, a move Treasury touts as a $9 billion annual gift to businesses. Critics, including financial watchdogs, aren’t buying it. They warn that this opens the door to illicit finance, letting shady actors hide behind shell companies. When money laundering spikes, it’s not the Wall Street titans who suffer; it’s the small retailers and family-owned shops caught in the crossfire.

History backs this up. After the 2008 financial crisis, lax oversight and repealed rules like Glass-Steagall left small businesses gasping as credit dried up overnight. Dodd-Frank stepped in to stabilize things, but now we’re racing backward. Treasury’s betting that less oversight equals more growth, yet the data tells a different story. High interest rates already choke small firms, with 77% of owners fretting over capital access. Piling on deregulation that weakens anti-money laundering defenses? That’s not relief; it’s a gut punch.

And let’s talk about the banking sector, which Treasury wants to ‘unleash’ through this rule purge. Community banks, the lifeblood of local lending, thrived under rules that balanced risk and opportunity. Scaling back now might juice short-term profits, but it invites the kind of reckless speculation that crashed the economy last time. Small businesses don’t need a replay of that nightmare; they need steady, reliable support to grow.

Some argue this is about efficiency, that outdated rules strangle innovation. Fair point, old regulations can ossify into dead weight. But Treasury’s not pruning with precision; it’s hacking away with a blunt axe. The Small Business Regulatory Reduction Act, floating around Congress, at least tries to weigh impacts before cutting. Treasury’s approach? It’s all speed, no substance, leaving small firms exposed to a financial wild west.

There’s a smarter path, one that doesn’t sacrifice safety for savings. Look at the Securities and Exchange Commission’s moves to tweak Regulation Crowdfunding, opening doors for startups to raise cash without drowning in bureaucracy. Or consider refundable tax credits for angel investors, a proven boost for small firms that doesn’t torch oversight. These ideas deliver tangible help without inviting chaos.

Treasury could lead here, championing reforms that actually work for Main Street. Instead, it’s doubling down on a deregulatory spree that echoes the Trump administration’s first term, when weakened anti-money laundering frameworks fueled a surge in financial crime. Cryptocurrency scams boomed, corruption crept in, and small businesses paid the price in a less transparent market. We can’t afford round two.

The stakes are global too. As the U.S. retreats from anti-corruption leadership, countries like the UK are stepping up, tightening their own rules. American small businesses deserve a Treasury that fights for them on the world stage, not one that hands criminals a playbook. Bessent talks a big game about prosperity, but prosperity built on sand washes away when the tide turns.

Treasury’s latest gambit isn’t the lifeline small businesses need; it’s a mirage that could leave them stranded. Real relief comes from targeted support, not a bonfire of rules that once kept the system honest. Small firms aren’t asking for handouts; they’re asking for a fair shot, a chance to grow without dodging fraudsters or begging for loans that never come.

America thrives when its small businesses thrive, and that takes a Treasury bold enough to protect, not just prune. Let’s demand a system that lifts up the dreamers and doers, not one that gambles their future for a flashy headline. The cost of getting this wrong is too steep to ignore.