Washington, D.C. – Late Tuesday, a federal judge in the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the onerous reporting requirements required of all beneficial owners of LLCs and all other private businesses, as required by the Corporate Transparency Act.
The measure was included in the National Defense Authorization Act of 2021, first vetoed by then-President Trump and later overridden by the House and Senate.
The ruling by District Judge Amos Mazzant temporarily halts the forced collection of beneficial ownership information, which was due to FinCEN by January 1, 2025.
Yaël Ossowski, Deputy Director of the Consumer Choice Center, praised the injunction as a good first step in halting the creeping encroachment on financial privacy by federal agencies.
“The reporting requirements of the Corporate Transparency Act are a slow-roll attack on financial privacy for ordinary people via a mass doxxing of LLCs. For small businesses and consumers that rely on them, this injunction removes the risk inherent in a centralized database of Americans’ sensitive financial information and personal data that would be prone to abuse,” said Ossowski.
Rather than deputizing financial institutions to spy on American business owners and consumers, the Consumer Choice Center believes the federal government and its agencies should look to protecting individuals’ information and minimizing the harm that could come from unauthorized leaks and hacks.
“The once again proves the crucial role of the judicial branch in protecting the individual rights of business owners, consumers, and all Americans, and should demonstrate that the rule of law and the presumption of innocence are integral to the American system,” added Ossowski.
Law enforcement agencies are still empowered to pursue reasonable suspicion of criminal activity, including tax evasion or money laundering, but must do so via legally obtained judicial warrants, which protects both consumers and firm owners.
“To capitalize on this temporary injunction, the Senate and House should pass the Saving Privacy Act, introduced by Sens. Mike Lee and Rick Scott, which would nullify the Corporate Transparency Act as well as offer meaningful reforms to the Bank Secrecy Act and other federal laws that put individual and consumer financial privacy at risk,” concluded Ossowski.
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The Consumer Choice Center is an independent, nonpartisan consumer advocacy group championing the benefits of freedom of choice, innovation, and abundance in everyday life for consumers in over 100 countries. We closely monitor regulatory trends in Washington, Brussels, Ottawa, Brasilia, London, and Geneva.
Find out more at www.consumerchoicecenter.org