Davis Polk partner Dan Stipano discussed the recent Alabama district court ruling that declared the Corporate Transparency Act (CTA) unconstitutional and the DOJ’s appeal with Thomson Reuters Regulatory Intelligence. 

“We…expect additional plaintiffs will challenge the CTA, potentially leading to the Supreme Court ultimately deciding whether the CTA is constitutional,” Dan noted. “Given the limited impact of the District Court’s opinion, we recommend all non-exempt reporting companies not covered by the injunction to continue to timely comply with the CTA’s [beneficial ownership information] reporting requirements.”

He added that the district court ruling will likely have “little to no effect” on financial institutions and their anti-money laundering obligations. 

“The decision is limited to the CTA, not the entirety of the Bank Secrecy Act,” Dan explained.

“INSIGHT: U.S. Justice Department challenges District Court ruling that beneficial ownership law is unconstitutional,” Thomson Reuters Regulatory Intelligence (March 13, 2024) (subscription required)  

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