Opinion: Sen. Brown should fight this law. It could fine, imprison small business owners.

Ohio’s small businesses are being threatened by a new federal law set to take effect at the end of this year. Entrepreneurs who don’t fully comply will face steep fines and even jail time. As chairman of the Senate Banking Committee, Sen. Sherrod Brown (D-OH) should help delay – if not outright repeal – the misguided law.

The Corporate Transparency Act (CTA) – passed in 2021 – requires certain businesses to divulge personal information about its owners and officers. More specifically, the soon-to-be enacted law will require the names, birth dates, personal addresses and photocopies of passports or driver’s licenses of anyone with “substantial control” of the company. And this information needs to be updated within 30 days of any changes.

In this scenario, if a manager quits unexpectedly and someone else is quickly promoted, the business owner must remember to report the change to the U.S. Treasury Department pronto, or they’re out of compliance. This red tape keeps the business from focusing on its real needs: serving its customers.

The policy is intended to crackdown on nefarious business schemes, including money laundering and other illegal financial practices. It’s an understandable objective and a sympathetic way for politicians supportive of the law to frame it to their constituents. But that characterization misses the mark by a mile.

Unlike what the name suggests, the CTA has nothing to do with large corporations. In fact, large and mid-sized companies are completely exempt from the paperwork and reporting requirements.

The law specifically targets small businesses that employ fewer than 21 workers or take in less than $5 million in revenue per year. So, the local restaurant or independent gym down the street is viewed by our politicians as a threat, but the large bank handling trillions of dollars in assets is no problem!

Beyond the blatant attack on privacy, the changes will create an extra expense for small businesses that are already operating under razor thin margins with our recent inflation.

It’s also not difficult to imagine politicians weaponizing the personal information of small business people to intimidate those that don’t drink the Kool-Aid on certain policy issues. Case in point: The Internal Revenue Service targeting conservative groups following the Tea Party movement during the last decade.

And to add insult to injury, most businesses don’t even know this new law exists. According to polling from the Job Creators Network Foundation, only about one-third of small businesses nationwide are aware of the CTA – meaning many Americans are facing strict penalties, including up to $10,000 in fines and two years in prison, for rules they don’t even know are on the books.

Fortunately, the CTA has hit some snags in the courts. But relief from the legal system may come too late. As a failsafe, Congress needs to act.

Legislation to delay implementation of the law is sitting before the banking committee – Brown’s domain. If he would allow this legislation to come to the Senate floor, small businesses could have sufficient time to prepare – or, in a perfect world, enough time for the CTA to be struck down.

Earlier this year, Brown posted on X: “I will always support Ohio small businesses.” He needs to prove that.

Gary James is the President of Dynalab, Inc., a small manufacturer based in Reynoldsburg. He is also a partner of the Job Creators Network Foundation.