On December 3, 2024, the ABA Banking Journal reported that a federal judge in Texas had issued a preliminary injunction blocking enforcement of the beneficial ownership reporting rule. This is less than a month before the January 1, 2025 deadline for businesses to report their beneficial owners to FinCEN.
According to the report, the National Federation of Independent Business and several of its members challenged the constitutionality of the Corporate Transparency Act, the 2021 bill that established a beneficial ownership information, or BOI, registry, and the requirement for businesses to report. The plaintiffs argued that the CTA went beyond Congress's power to regulate business between states, that it violates the First Amendment by forcing people to share information, and that it breaks the Fourth Amendment by requiring the release of private details.
In a statement, FinCEN confirmed the suspension of CTA filing obligations during the nationwide injunction, stating:
“In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
Read the ABA Banking Journal’s report here.
FinCEN’s statement can be found here.