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

Student Chapters | Workforce Development

Jul 25, 2025

NAHB's Student Chapters Helped Give Her Confidence to Pivot Careers

Zhetique Gunn's early exposure to building and problem-solving has led to national recognition and a city-level impact as an urban planner in Washington, D.C.

Jul 24, 2025

Federal Court Upholds New York State Gas Ban

The federal court for the Northern District of New York on July 23 upheld New York state’s “gas ban” legislation. New York’s legislation is the first statewide law that restricts natural gas use in new buildings, effectively banning gas stoves and other fossil fuel appliances in most new construction starting in 2026.

View all

Latest Economic News

Economics

Jul 25, 2025

Market Share of 5,000+ Square Foot New Homes Started Declines in 2024

In 2024, there were 24,000 homes that exceeded 5,000 square feet, equating to a 2.3% market share of all new homes started. Both the number and market share for 5,000+ square foot homes experienced declines from 2023, according to the annual data from the Census Bureau’s Survey of Construction (SOC).

Economics

Jul 24, 2025

New Home Sales Hold Steady at a Relatively Tepid Level

Challenging affordability conditions, elevated interest rates and economic uncertainty continue to act as headwinds on the housing sector as many potential buyers continue to stay on the sidelines.

Economics

Jul 23, 2025

Existing Home Sales Retreat to 9-Month Low

Existing home sales fell to 9-month low in June as home prices hit another monthly record high, according to the National Association of Realtors (NAR). Sluggish pace of sales suggest that higher mortgage rates and elevated home prices are continuing to sideline buyers, despite improved inventory conditions.