The January deadline for covered businesses to register their beneficial ownership information is once again on hold following a Dec. 26 order from the Fifth Circuit Court of Appeals.
On Dec. 23, the Fifth Circuit lifted a nationwide injunction issued by the district court judge earlier this month in a Texas lawsuit challenging the Corporate Transparency Act, which requires covered businesses to report their beneficial ownership information to the Financial Crimes Enforcement Network. Three days later, “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments,” the panel of Fifth Circuit judges that will consider the merits of the government’s appeal of the preliminary injunction vacated that decision and once again enjoined enforcement of the reporting rule and CTA.
The lawsuit in Texas was filed by the National Federation of Independent Business and several of its members. The plaintiffs argued that the CTA exceeded Congress’ authority to regulate interstate commerce, that it violates the First Amendment by compelling speech and infringing freedom of association and that it violates the Fourth Amendment by forcing the disclosure of private information.
Bankers should monitor FinCEN’s BOI page for updates and revised instructions.
