Nationwide Injunction Halts Corporate Transparency Act Enforcement

The U.S. District Court for the Southern District of Texas has issued a nationwide injunction, temporarily halting enforcement of the Corporate Transparency Act (CTA) and its associated Beneficial Ownership Information (BOI) Reporting Rule. This decision, handed down on December 3, 2024, suspends the compliance deadline previously set for January 1, 2025, pending further court action.

The CTA, a key provision of the Anti-Money Laundering Act (AML) of 2020, was designed to curb illicit financial activities such as money laundering, tax evasion, and terrorist financing by requiring certain corporations and LLCs to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). While widely recognized as an important tool in anti-money laundering efforts, the law has faced significant legal challenges since its inception, culminating in this latest injunction.

The ruling found the CTA and BOI Reporting Rule to be “likely unconstitutional,” though it stopped short of declaring them invalid. The court’s order specifically blocks the CTA (31 U.S.C. § 5336) and the BOI Reporting Rule (31 C.F.R. 1010.380) until further notice, stating that neither may be enforced without further review. The compliance deadline has been stayed under the Administrative Procedure Act (APA), offering temporary relief to businesses nationwide.

This ruling is particularly significant for the numismatic and precious-metals industries, where many small businesses fall under the CTA’s reporting requirements. While the law includes some exemptions based on revenue and other thresholds, its broad applicability has led to widespread concern over the burden of compliance.

The National Coin & Bullion Association (NCBA) is closely monitoring these developments. NCBA recognizes the importance of anti-money laundering initiatives while also advocating for balanced regulations that do not impose undue hardship on small businesses.

Though this injunction provides a temporary reprieve for business owners, it remains crucial for numismatic businesses to stay informed about potential changes. NCBA encourages all affected businesses to consult with legal professionals to understand how this ruling may impact their compliance obligations.

For more information and updates, visit the NCBA website at ncbassoc.org.