In 2021, Congress approved the Corporate Transparency Act as part of an anti-money laundering bill tucked into the National Defense Authorization Act, which is one of the few remaining pieces of legislation Congress views as “must-pass” each year. At the time, proponents of the Corporate Transparency Act aimed to combat illicit activity including tax fraud, money laundering and financing for terrorism by capturing more ownership information for specific U.S. businesses. Since that time, NRCA and its allies in the business community have staunchly opposed the act because it would require millions of small-business owners—who pose no risk to national security—to provide sensitive private data to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) under the guise of combatting illicit finance.
During the past few years, coalition efforts have largely been successful with delaying implementation and/or limiting the overall scope of the Corporate Transparency Act. For example, with NRCA’s support, the National Small Business Association filed a legal challenge to the law in 2022, and in March 2024, Alabama Federal District Court Judge Liles Burke agreed and deemed it unconstitutional. Although relief was only provided to the plaintiffs in that case, the decision was critical because it paved the way for additional court challenges. In fact, there are currently a dozen active cases against the act across the U.S.
In late 2023, the House of Representatives also passed bipartisan legislation that would have extended the Corporate Transparency Act reporting deadlines by a vote of 420-1. In addition, more than 80 senators and representatives sent a letter to FinCEN calling for a one-year delay of Corporate Transparency Act reporting requirements. Capitalizing on congressional action, NRCA (along with its coalition partners) sent a letter encouraging Congress to delay Corporate Transparency Act actions for one year at a minimum and another letter to support legislation to fully repeal the act. Although Congress has yet to enact legislation to repeal the act, Republicans and Democrats in both chambers are largely aligned in that domestic small businesses should be exempt from sharing sensitive data via burdensome reporting requirements.
Update No. 1
Following repeated constitutional judicial challenges to the Corporate Transparency Act and strong bipartisan sentiment in Congress to roll back reporting requirements, on March 26, 2025, the Department of Treasury announced formal publication of the FinCEN interim final rule that removed the requirement for U.S. companies and U.S. persons to report beneficial ownership information under the Corporate Transparency Act and narrowed the rule’s scope to foreign reporting companies. The interim final rule took effect immediately. The action followed the Department of Treasury’s March 2, 2025, announcement suspending enforcement of the Corporate Transparency Act. Undoubtedly, the interim final rule showcased a huge temporary win for NRCA members and small businesses.
Update No. 2
On Dec. 16, 2025, the Eleventh Circuit Court of Appeals reversed the aforementioned landmark Alabama district court ruling the Corporate Transparency Act was unconstitutional. The Eleventh Circuit’s action was a result of the Department of Justice appealing the initial court decision, which, at the time, was still under the Biden administration. Writing for the Eleventh Circuit, Judge Andrew Brasher concluded the Corporate Transparency Act falls within Congress’ power under the Commerce Clause and rejected Fourth Amendment challenges, finding the law’s reporting requirements are reasonable because they are uniform, limited in scope and subject to privacy protections.
What is certain is NRCA will continue to work diligently to oppose the Corporate Transparency Act’s implementation across multiple fronts
Despite the setback, there is strong belief among legal experts the Corporate Transparency Act is and always was destined for the U.S. Supreme Court. Experts also believe the Eleventh Court’s treatment of Commerce Clause and Fourth Amendment concerns are likely out of sync with the Supreme Court’s current judicial makeup.
In addition, the decision to overturn the Alabama ruling had no bearing on the interim final rule issued by the Department of Treasury to exempt U.S. companies and citizens from the Corporate Transparency Act’s reporting requirements. This remains in effect.
Update No. 3
On Jan. 20, 2026, NRCA joined more than 100 other trade associations urging the Department of Treasury to take immediate action to protect small-business owners, including NRCA members, from unnecessary privacy and cybersecurity risks stemming from the Corporate Transparency Act. Specifically, the letter called on Secretary of Treasury Scott Bessent to purge the Corporate Transparency Act database of beneficial ownership information submitted by domestic entities that are no longer required to file.
Although the Trump administration took the important step of narrowing the Corporate Transparency Act’s scope to apply to foreign entities only, unfortunately, before the Department of Treasury corrected course, some 16 million domestic entities had complied with the Corporate Transparency Act’s reporting requirements deadline. These beneficial owners’ sensitive personal information—including their names, addresses, and passport or driver’s license numbers—remain in a database managed by FinCEN, exposing them to ongoing cybersecurity and unauthorized disclosure risks. Hence, the call for the government to purge existing sensitive information.
What’s the next move?
The January 2026 letter to the Department of Treasury also asked the agency to quickly finalize the interim rule to permanently exempt U.S. businesses from the reporting requirement once and for all. This is particularly important given the recent activity in the courts where it has been noted that 12 federal cases are currently challenging the validity of the Corporate Transparency Act, yet the constitutional questions surrounding the law are far from certain.
What is certain is NRCA will continue to work diligently to oppose the Corporate Transparency Act’s implementation across multiple fronts. The limited scope of FinCEN’s current rules combined with continued legislative advocacy and potential Supreme Court review means we have multiple paths forward. NRCA will continue to provide updates as they occur.
BRAD STINE
Director of federal affairs
NRCA Washington, D.C.
