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NEWS | NSBA Awaiting Judge Ruling on CTA

Unduly burdening small businesses under the CTA is not the way to stem money laundering.

Last week, NSBA’s legal team made its oral arguments in the lawsuit against the U.S. Department of the Treasury at the Huntsville U.S. District Court.


The case is a challenge to the constitutionality of the Corporate Transparency Act (CTA) and specifically the law’s beneficial ownership reporting requirements. The law would require nearly every American who runs or wants to form a corporation or LLC to give the Financial Crimes Enforcement Network (FinCEN)deeply personal information of its owners like date of birth, current address, and an image of their driver’s license.

During oral arguments, NSBA – on behalf of the entire nation’s small-business community – argued that CTA has been mired in confusion and ambiguities start to finish. Not only is it bad policy, it is unconstitutional.

Commenting at the courthouse following the hearing, NSBA President and CEO Todd McCracken stated, “Americans who are not suspected of doing anything wrong are being asked to provide deeply personal information to a government agency, which is putting the information in a database for criminal law enforcement purposes. These small-business owners will have to pay on average $8,000 in compliance costs in the first year alone. Small-business owners justifiably have little confidence in the federal government’s willingness to secure their personal data, the law calls for the government to share this information with foreign governments.”

The oral arguments additionally focused on challenges to the CTA for violating plaintiff’s First, Fourth, and Fifth Amendment rights while also simply being beyond the scope of Congress’s powers.

“Congress, whether or not it has good intentions, is always constrained by the Constitution,” said John Neiman, one of the attorneys leading the NSBA legal team. “Our challenge is trying to get Congress to follow the law and not create an unconstitutional burden on Americans.”

Isaac Winkles, the owner of Alabama Property Management, Inc. in Huntsville, along with other local business owners and NSBA members, was also in attendance during the oral arguments.

A ruling from the judge is expected before the end of the year.

Follow NSBA for the latest on how the CTA is not the way to stem money laundering.

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