U.S. MSB Daily News
Deck: 11th Circuit says the Corporate Transparency Act is constitutional — while FinCEN’s interim rule keeps most U.S. companies off the BOI filing hook.
USMSB.com — The Corporate Transparency Act just got a courtroom lifeline — and MSB compliance teams got another reminder that the BOI landscape is still a moving target.
In a Dec. 16 decision, the 11th U.S. Circuit Court of Appeals reversed a lower-court ruling in National Small Business United v. U.S. Department of the Treasury, holding that the CTA’s beneficial ownership reporting mandate is a valid use of Congress’ powers and doesn’t facially violate the Fourth Amendment.
The ruling, in plain English
The appeals court said the CTA passes constitutional muster because:
- It targets conduct the court called “economic in nature,” saying the law “effectively prohibits anonymous corporate dealings.”
- It’s a uniform reporting requirement for companies that meet the statute’s definition — with “nothing arbitrary or discretionary about its application.”
- The law includes privacy guardrails limiting disclosure and requiring Treasury to protect the data.
The big twist: Treasury/FinCEN already pulled back the filing requirement
Even with the CTA upheld, Treasury has moved to stop enforcing BOI penalties against U.S. citizens and domestic reporting companies and to narrow the rule’s scope.
FinCEN followed with an interim final rule that:
- Removes BOI reporting for U.S. companies and U.S. persons; and
- Redefines “reporting company” to cover only certain foreign entities registered to do business in a U.S. state or tribal jurisdiction (formerly “foreign reporting companies”).
FinCEN also said foreign reporting companies won’t have to report U.S. persons as beneficial owners, and U.S. persons won’t have to provide BOI for those foreign entities.
Who’s cheering — and why
Transparency advocates framed the decision as a win against shell-company abuse.
“The Court’s decision confirms what Congress understood,” FACT Coalition deputy director Erica Hanichak said, arguing anonymous companies fuel fraud, drug trafficking, and national security threats.
On the other side, Treasury Secretary Scott Bessent called Treasury’s non-enforcement move “a victory for common sense,” describing BOI requirements as part of “burdensome regulations” on small businesses.
Critics’ concerns
In court, the plaintiffs argued Congress lacked authority to enact the CTA and that the reporting regime violates the Fourth Amendment — arguments the 11th Circuit rejected.
Separately, Treasury has said its enforcement pause is meant to reduce regulatory burden on U.S. taxpayers and small businesses.
What it means for MSBs
- If enacted, the proposal could require MSBs to… plan for BOI-related customer questions and documentation requests to remain a live issue even as court fights continue.
- The bill would place verification duties on… covered entities under the CTA framework — and today’s interim rule means the practical BOI burden is largely concentrated on certain foreign entities for now.
- Providers could face penalties if… they assume the BOI status quo won’t change; policy shifts and litigation outcomes can whipsaw operational expectations.
- Training, audit readiness, and agent/vendor oversight should be calibrated to avoid inconsistent treatment of customers and the risk of disparate impact concerns if onboarding scripts diverge across locations.
What’s next
- The 11th Circuit decision reverses and remands the case back down the chain.
- FinCEN says it is accepting comments on the interim final rule and intends to finalize it this year.
- Supporters also note the appellate decision could still face further appeal activity.
Source: Reporting based on the 11th Circuit opinion filed Dec. 16, 2025, and Treasury/FinCEN releases dated March 2, 2025 and March 21, 2025.
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