Trump’s Last Loyal Constituency

By David Frum

Sunday, August 16, 2026

 

“Many secrets; no mysteries.” That’s the master code of the Trump administration. When it does something strange, there’s never any mystery as to why: Somebody close to the president, or possibly the president and his family themselves, intends to score a dishonest dollar. Exactly who and how may be secret. Exactly why is no mystery.

 

So it is with the news that the Department of the Treasury has ended ownership-reporting requirements for U.S. businesses and purged the existing database of ownership information. This seemingly technical-sounding change is a huge gift to financial crooks, who can now store and launder dark money in U.S. financial institutions with less risk of detection. But the gift comes at the direct expense of banks, mutual funds, insurance companies, and other financial institutions, which now have to shoulder the burden of verifying customer data themselves.

 

The Treasury advertises the measure as deregulatory, lifting burdensome red tape from business owners. But the relief to honest business owners is tiny. The added burden on the financial sector is huge. The real winners here are shady business owners. In 2021, Capital One, the Trump Organization’s then-bank, closed more than 300 of the Trump Organization’s accounts on suspicion that they violated anti-money-laundering rules. The action just taken by the Treasury may best be understood as payback for those who tried to enforce the law against Donald Trump.

 

After the 9/11 terror attacks, Congress took action to prevent terrorists and other criminals from using the U.S. financial system to move money around undetected. Congress enacted laws requiring U.S. financial institutions to “know your customer.” If someone tried to open an account for a shell company, perhaps owned by another shell company, the financial institution had to pierce the layers of concealment to know the human beneficial owners of the account.

 

The information required was pretty basic: name, address, birth date, and a government ID—a Social Security card, say, or a passport. For the great majority of U.S. enterprises, these rules were easy to comply with. Almost 80 percent of American businesses have no employees other than the owner. You have probably divulged the requested information dozens of times without inconvenience.

 

For the institutions receiving the information, however, its collection was very burdensome. Most clients told the truth. Some did not. How to tell which was which—and how to authenticate the information provided by untruthful clients? The consequences of a mistake could be catastrophic for the financial institution. In 2024, TD Bank paid $3 billion in fines—and accepted limits on the future growth of its business—to settle U.S. claims that it had not properly monitored accounts opened by fentanyl traffickers.

 

To protect themselves, financial institutions pay third-party agencies to check information about their customers, especially those algorithmically identified as high-risk. One study puts the cost of financial-crimes compliance in the United States and Canada at $61 billion.

 

Financial institutions have clamored for years for some relief from the tangled mess of reporting imposed on them. In 2020, Congress attached a new Corporate Transparency Act to the 2021 Pentagon budget, which imposed an obligation on most businesses operating inside the United States to report their ownership directly to the government. The Corporate Transparency Act authorized the Treasury to establish a database of this information. At first, the database would be accessible only to law enforcement, but the plan was to open the database to financial institutions too. If a financial institution sensed something amiss, the federal database would assist its investigation. The goal was less to exclude criminals from the banking system than to use “the banks to track the money and find the criminals,” Aaron Klein, an expert in banking regulation at the Brookings Institution, explained to me.

 

By destroying the database, the Trump administration has removed that help from financial institutions and foreclosed an essential avenue for tracking crooks.

 

Despite the Treasury’s claims that this purported deregulation of financial information “is a victory for common sense and American small businesses,” in the words of Treasury Secretary Scott Bessent, the change provides scarcely any benefit at all to honest businesses. They still have to report the relevant names, addresses, dates of birth, and government-ID numbers every time they transact with a financial institution. That burden remains the law. They have been relieved only of the slight additional chore of filing the same information with the federal government—a chore that lowered their costs of doing business. Those costs are now destined to rise.

 

The purported “deregulation” is, however, a great benefit to tax evaders, drug traffickers, money launderers, and other criminals hoping to elude scrutiny of their finances. If they can locate a weak or careless or greedy financial institution, they can open accounts with imperfect information—and they now stand a much higher chance of getting away with their deception. The Financial Accountability and Corporate Transparency Coalition estimates that the Treasury’s action reduces the number of enterprises required to report their true ownership from 32.6 million to 11,667.

 

The Trump administration is the most pro-crime administration in United States history—as long as the crime in question is committed by the president, his family, his donors, or his friends. Klein at Brookings noted that Trump is using anti-money-laundering laws to require notice of remittances to Mexico of as little as $200 (the legal threshold is $10,000) even as his associates, including Paul Manafort, are allowed to keep anonymous bank accounts in Delaware.

 

Across the federal government, enforcement against rich-people crimes has been crippled or abandoned. Inside the Department of Justice, resources have been redistributed away from white-collar-crime enforcement, and Trump has stopped enforcing laws against bribing foreign officials altogether. Pre-Trump, some three dozen lawyers worked on domestic public integrity at DOJ. That figure has been cut to two. The team that policed lawbreaking in the crypto industry has been disbanded.

 

The Treasury’s announcement last week is merely the latest Trump gift to crooks, cheats, and traffickers. As his popularity collapses among almost every other demographic, Trump seems to recognize that the criminal-American community is his last and most loyal constituency.