NAHB Supports Legal Challenge to New Beneficial Ownership Reporting Rule

Legal
Published
Contact: Jeff Augello
[email protected]
AVP, Association Counsel
(202) 266-8490

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.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Economics

May 23, 2025

Volatile Spring Selling Season Continues

Sales of newly built, single-family homes in April increased 10.9% to a 743,000 seasonally adjusted annual rate from a downwardly revised March number, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in April was up 3.3% compared to a year earlier.

Material Costs

May 22, 2025

NAHB Members Cite Impact of Tariff Uncertainty on Home Building

Tariff uncertainty from the Trump administration continues to impact home builders across the country, as builders prepare for potential price hikes and supply chain issues. NAHB members have been sharing the impact that these tariffs are having with media outlets across the United States.

View all

Latest Economic News

Economics

May 22, 2025

Existing Home Sales Fall in April

Despite the brief retreat in mortgage rates and increased supply, existing home sales dropped to 7-month low in April, according to the National Association of Realtors (NAR). This unexpected decline suggests buyers’ activity continues to be constrained by economic uncertainty and ongoing affordability challenges even with improved market conditions.

Economics

May 22, 2025

Income Growth Helps Mute Existing Affordability Constraints

Despite solid income gains and lower home prices, Americans still continue to face major housing affordability challenges, according to the latest data from the National Association of Home Builders (NAHB)/Wells Fargo Cost of Housing Index (CHI).

Economics

May 21, 2025

Gains for Multifamily Missing Middle over Last Year

The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties.