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

Economics

Apr 01, 2025

Millennial Buyers Prefer Better, Not Bigger Homes

As the housing industry celebrates New Homes Month in April, millennial buyers say they are willing to compromise when it comes to space. NAHB analysis found that millennial buyers prefer more square footage than other generations, but most would choose a smaller feature-rich home for the same purchase price.

Economics

Apr 01, 2025

Uncertainty Reigns as 'Liberation Day' on Tariffs Approaches

President Trump has hailed April 2 as “Liberation Day,” when he said he will announce global tariffs that could have far-reaching ramifications for the residential construction industry.

View all

Latest Economic News

Economics

Apr 01, 2025

Private Residential Construction Spending Rises in February

Private residential construction spending increased by 1.3% in February, rebounding from a 1.2% dip in January. The growth was largely driven by higher spending on single-family construction and residential improvements. On a year-over-year basis, the February report showed a 1.6% gain, indicating a modest growth in private residential construction spending during market uncertainties.

Economics

Apr 01, 2025

Soft Job Openings Estimate for Construction

After a period of slowing associated with declines for some elements of the residential construction industry, the count of open construction sector jobs remained lower than a year ago, per the February Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS).

Economics

Mar 31, 2025

Affordability Pyramid Shows 94 Million Households Cannot Buy a $400,000 Home

NAHB recently released its 2025 Priced-Out Analysis, highlighting the housing affordability challenge. While previous posts discussed the impacts of rising home prices and interest rates on affordability, this post focuses on the related U.S. housing affordability pyramid. The pyramid reveals that 70% of households (94 million) cannot afford a $400,000 home, while the estimated median price of a new home is around $460,000 in 2025.