Trade Associations Ask Supreme Court to Clarify Corporate Transparency Act’s Constitutionality

FEDA has joined other business advocacy groups and trade associations in asking the Supreme Court to provide a clear ruling on the constitutionality of a 2021 law that forces small businesses to report their owners’ private information.

The Corporate Transparency Act (CTA) requires companies with fewer than 20 employees to disclose beneficial ownership information to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The law was intended to combat illicit financial activity such as money laundering and tax fraud. However, in practice, it created a new compliance burden for 32 million businesses despite no evidence that the covered companies were actually engaged in illegal activity.

The CTA went into effect at the beginning of 2024 but it was quickly challenged by business advocacy groups. In January 2026, a federal appeals court upheld the law, determining that the reporting requirements fell within Congress’ power to regulate economic activity. The Supreme Court is now deciding whether to review two cases involving the CTA: National Small Business United v. Bessent and Texas Top Cop Shop, Inc. v. Blanche. These cases raise fundamental questions about whether the CTA expands the scope of Congress’ Commerce Clause and whether it conflicts with the Fourth Amendment’s protections against unreasonable searches and seizures by the government.

The Trump administration has attempted to reduce the impact of the law. In March 2025, the U.S. Treasury Department announced that it would not enforce any penalties or fines against U.S. citizens or domestic companies that do not report beneficial ownership information. However, the requirement remains in place for foreign companies.

In a letter to the U.S. Treasury Department and the Department of Justice, a group of trade associations is urging the Supreme Court to take up the cases to resolve the CTA’s constitutional questions. “Continued ambiguity risks repeated cycles of litigation, shifting compliance obligations, and confusion among millions of affected entities and individuals attempting in good faith to understand their obligations under federal law,” the letter states.

The full letter is available here.