The Justice Department has requested the Supreme Court to reinstate the Corporate Transparency Act (CTA), a 2021 law requiring millions of businesses to disclose ownership information to combat money laundering. Enforcement of the law, which mandates reporting details like owners’ dates of birth and addresses to the Financial Crimes Enforcement Network (FinCEN), was blocked after a federal district judge in Texas ruled it likely exceeded congressional authority.
The Biden administration argues the law is constitutional under the Commerce and Necessary and Proper Clauses, stating the lower court overstepped by issuing a nationwide block instead of limiting the injunction to the parties involved in the case. The 5th Circuit Court of Appeals declined to lift the block, prompting the Justice Department’s emergency Supreme Court application.
Four business entities, a tech company owner, and the National Federation of Independent Business (NFIB) initially sued, alleging the law is overly burdensome. The Justice Department is asking the Supreme Court to either reinstate the law or review the broader implications of nationwide injunctions.
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