Washington, D.C. — The Supreme Court on Thursday revived a rule that owners of millions of small businesses register with an arm of the Treasury Department charged with fighting money laundering and other financial crimes.
The justices approved an urgent request from the Justice Department near the end of the Biden administration. This decision allows the execution of the Corporate Transparency Act, which was passed in 2021 to combat the illegal use of anonymous shell companies.
Owners and part-owners of about 32.6 million small companies need to register their personal information with FinCEN, which is part of the Treasury Department. The information includes pictures of identification and home addresses.
It’s not clear if the Trump administration will try hard to enforce the registration requirement. This rule has faced opposition from Republican states, lawmakers, and conservative business groups.
A federal judge in Texas stopped the registration rule, deciding that Congress did not have the power to make the company transparency law. A group from the 5th U.S. Circuit Court of Appeals put it on hold while they review the judge’s decision.
The Supreme Court’s decision lets the registration rule be enforced while the Texas case is being considered in court.
The National Small Business Association, which previously took legal action against the reporting requirements, asked FinCEN to allow businesses enough time to meet the new rules.
“This decision adds to the uncertainty faced by millions of small businesses,” said Todd McCracken, President and CEO of the NSBA. “This constant back-and-forth is a big problem and causes a lot of uncertainty for millions of small businesses in our country.”
He asked Congress to postpone and cancel the CTA.
Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council, said this order is probably not the last chapter in the ongoing issues with the reporting rule.
“Right now, with uncertainty around the legality of the CTA, we are asking President Trump to help small business owners by providing immediate relief from penalties for late filings. There are likely millions affected,” she said. “The confusion and problems with the CTA are still going on, and Congress needs to take action and remove the requirement.”
A group of labor, environmental, and other progressive organizations that support the law thanked the court for allowing it to be enforced.
“For years, police and prosecutors have tried to combat a flood of dirty money associated with often violent crimes, but that can’t happen if they run into a wall of shell companies and secrecy,” Ian Gary, executive director of the FACT Coalition, said in a statement. “Today’s order highlights the need to follow the flow of money so police can catch criminals who misuse the system.”
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