NAHB Supports Legal Challenge to New Beneficial Ownership Reporting Rule
NAHB joined a coalition of business groups in filing an amicus brief in National Small Business United, et al. v. U.S. Department of Treasury, et al., challenging the constitutionality of the recently enacted Beneficial Ownership Information Reporting Rule under the Corporate Transparency Act.
On Jan. 1, new business reporting requirements were imposed under the Corporate Transparency Act (CTA) by the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). The CTA was designed to provide law enforcement agencies with business information for the purpose of detecting and preventing illicit activity, including tax fraud, money laundering and financing for terrorism activities.
Although well intentioned, the new rule is onerous. Most U.S. small businesses (corporations, LLCs, limited partnerships) incorporated prior to the rule’s enactment have one year to file highly personal “Beneficial Owner” information with FinCEN, including full names, dates of birth, home addresses, Social Security numbers, and picture proof of the disclosed information. Small business entities incorporated on or after Jan. 1, 2024, have 90 days to make the required filings.
In a March 1 ruling, the Northern District Court of Alabama found the CTA unconstitutional on the grounds that it exceeds the constitutional limits placed on congressional powers. The Department of Treasury has been enjoined from enforcing the CTA against plaintiffs in the case.
FinCEN has since issued a press release acknowledging that it will comply with the court’s injunction, but it continues to assert its authority to enforce the law against nonparties that fail to file the necessary Beneficial Owner disclosures remains intact. The Treasury Department then went on to appeal the ruling to the Eleventh Circuit.
NAHB — together with the National Federation of Independent Business, Associated General Contractors of America, and American Farm Bureau Federation — filed an amicus brief in support of Plaintiffs-Appellees on May 20. The brief focuses on Congress’ limited commerce clause authority to regulate the channels and instrumentalities of interstate commerce, and activities that have a substantial effect on interstate commerce. To exercise such power, the activity being regulated must be an economic activity. Because the CTA regulates the noneconomic activity of business incorporation, it is an unlawful exercise of Congress’ commerce clause authority.
A ruling in this case from the Eleventh Circuit is expected later this summer.
Latest from NAHBNow
Jul 03, 2025
Consumer Confidence Retreats in JuneAfter a strong rebound in May, consumer confidence resumed its downward trend in June. Consumers remain concerned about the economy and labor market amid ongoing uncertainty, especially around tariffs.
Jul 02, 2025
5 Proven Strategies Smart Builders Use to Grow in Any MarketSound Capital has worked with builders across market cycles for over 20 years. They have seen who thrived when others pulled back, and they've studied the strategies they used to scale while competitors were sidelined. Here are five things they all had in common.
Latest Economic News
Jul 03, 2025
Solid Job Growth in JuneThe U.S. labor market continued to show resilience in June, with steady job gains led by state/local government and health care sectors.
Jul 02, 2025
Two or More Story Home Starts Rebound in 2024Over half of new single-family homes built in 2024 were two or more stories, according the recent release of the Census Bureau’s Survey of Construction (SOC). After declining in 2023, the share of homes started with two or more stories increased again in 2024, continuing the upward trend in place since 2020.
Jul 01, 2025
May Private Residential Construction Spending DipsPrivate residential construction spending fell by 0.5% in May, marking the fifth straight month of decreases. This drop was primarily driven by reduced spending on single-family construction. Compared to a year ago, total spending was down 6.7%, as the housing sector continues to navigate the economic uncertainty stemming from ongoing tariff concerns and elevated mortgage rates.