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U.S.|Supreme Court Revives Law Meant to Fight Money Laundering
https://www.nytimes.com/2025/01/23/us/supreme-court-money-laundering.html
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The Corporate Transparency Act, which requires businesses to disclose ownership information, was blocked by a federal judge as beyond Congress’s authority.
Jan. 23, 2025, 2:45 p.m. ET
The Supreme Court on Thursday revived a federal law requiring companies to report information about their owners in an effort to combat money laundering, the drug trade and terrorism.
The court’s brief order gave no reasons, which is typical when the justices act on emergency applications. The ruling was provisional, reinstating the law while a challenge to it moves forward.
Critics say that the law, the Corporate Transparency Act of 2021, is needlessly burdensome, a threat to privacy and an unconstitutional federal intrusion on matters that have been historically regulated by states.
The challenge to the law was brought by a firearms dealer, a technology company, a dairy, the Libertarian Party of Mississippi and the National Federation of Independent Business, which was the lead plaintiff in the first major challenge to the Affordable Care Act. As in that case, the plaintiffs in the challenge to the transparency law argued that the Constitution’s commerce clause did not authorize Congress to regulate what they said was inaction rather than economic activity.
The challengers added that the law covers tens of millions of small entities, including homeowners’ associations and family trusts. Complying with the law will collectively cost tens of billions of dollars, they said.
Judge Amos L. Mazzant of the Federal District Court in Sherman, Texas, blocked the law nationwide, saying that Congress had overstepped its constitutional authority.
