U.S.(Washington Insider Magazine) – A federal judge in Texas has issued a nationwide injunction, blocking the enforcement of the Corporate Transparency Act (CTA), a key anti-money laundering law. The law, enacted in 2021, mandates that corporations and LLCs disclose their real beneficial owners to the U.S. Treasury Department.
U.S. District Judge Amos Mazzant, based in Sherman, Texas, ruled in favor of the National Federation of Independent Business and several small businesses, concluding that the CTA was likely unconstitutional. Mazzant stated that the law represented an unprecedented attempt by the federal government to interfere with a traditionally state-managed process, particularly the creation of companies and corporations.
This decision is the second ruling against the CTA’s constitutionality. Earlier, an Alabama federal judge issued a narrower injunction against the law in response to a separate legal challenge. Mazzant’s ruling blocks enforcement nationwide, halting the Jan. 1 deadline for companies to comply with the law.
The Corporate Transparency Act was enacted as part of a broader defense spending bill under President Donald Trump’s administration. Proponents argued that it would help combat money laundering and illicit financial activities by making it harder for criminals to hide behind anonymous corporate structures.
Despite this, the law has faced pushback from small businesses and groups like the National Federation of Independent Business, which argue that it imposes unnecessary burdens on companies, violating states’ rights under the Tenth Amendment.
The ruling is a significant blow to the Treasury Department’s efforts to curb money laundering and illicit financial activity, with the future of the law now in the hands of higher courts.
