Treasury Cuts Red Tape: $10B Relief for Small Businesses

It came out of nowhere for many small business owners: a sweeping move by the U.S. Department of the Treasury to scrap 15 rules and guidance materials. Announced on April 9, 2025, the decision targets regulations spanning decades, from outdated relics to more recent policies that officials say weighed heavily on America’s entrepreneurs. The Treasury, alongside the Internal Revenue Service (IRS) and the Financial Crimes Enforcement Network (FinCEN), framed this as a lifeline for small businesses struggling under compliance costs.

This isn’t a standalone effort. Just weeks earlier, the Office of the Comptroller of the Currency rescinded two rules of its own, and Treasury had already signaled plans to lighten FinCEN’s beneficial ownership reporting requirements. The stakes are high, with estimates pegging first-year savings at over $10 billion for American companies, followed by $9 billion annually. For a sector that drives over 62% of new U.S. jobs, the promise of relief resonates deeply.

At its core, the Treasury’s push aims to free up small businesses, often seen as the heartbeat of local economies, from red tape. Secretary Scott Bessent hailed the move as part of a broader vision to unlock prosperity by easing burdens on Main Street. The rules on the chopping block include long-forgotten mandates and policies from the prior administration that, according to Treasury officials, stifled growth. Plans are underway to review IRS rules and banking regulations over the coming months, with an eye toward boosting lending and investment.

Take the rollback of FinCEN’s beneficial ownership rules, for instance. Under the Corporate Transparency Act, companies once faced hefty reporting requirements to disclose who truly owns them. Now, U.S.-based firms are largely exempt, a shift projected to slash compliance costs significantly. Supporters argue this frees up resources for hiring or tech upgrades, while others wonder if it leaves gaps in tracking financial wrongdoing.

Small businesses have long voiced frustration over regulatory hurdles. Compliance costs hit them harder than big corporations, eating up about 20% more of their budgets, according to recent studies. With high interest rates already squeezing access to loans, the Treasury’s actions could offer breathing room. Advocates for deregulation, including some policymakers in Congress, point to historical wins, like the telecom and airline shake-ups of the late 20th century, which opened doors for smaller players to thrive.

The Securities and Exchange Commission is also exploring tweaks to crowdfunding rules, aiming to help startups raise cash more easily. For the 77% of small business owners who worry about capital, these changes signal hope. If successful, the savings could spark a wave of hiring or innovation, redirecting funds from paperwork to paychecks.

Not everyone’s sold on the plan. Scaling back rules, especially those tied to financial transparency, has some experts on edge. The rollback of beneficial ownership reporting, while a boon for businesses, might weaken efforts to spot money laundering or corruption, critics warn. Financial services professionals are already bracing for a spike in fraud risks in 2025, fueled by gaps in anti-money laundering frameworks and the rise of unregulated cryptocurrency markets.

History offers cautionary tales here. The 1999 repeal of Glass-Steagall unleashed lending but set the stage for the 2008 crisis, when credit dried up overnight. Deregulation can cut both ways, giving small firms a leg up while exposing them to fiercer competition or systemic shocks. Striking a balance between relief and oversight is the tightrope Treasury officials now walk.

The Treasury isn’t stopping here. Over the next few months, it plans to dig deeper, targeting IRS rules that bog down taxpayers and banking regulations that tie up capital. Bessent has stressed the goal of boosting lending to everyday businesses, arguing that current policies slow wage growth and investment. It’s a vision rooted in the belief that less red tape means more room for America’s industrial base to rebound.

Yet the debate lingers over what’s gained versus what’s lost. Will this spark a small business renaissance, or leave the financial system vulnerable? The numbers suggest real savings, but the risks - from unchecked financial crime to market instability - aren’t easily dismissed. For now, small business owners and watchdogs alike are keeping a close eye on Washington.