Supreme Court reinstates law intended to combat money laundering

The Supreme Court on Thursday reinstated a federal law requiring companies to disclose information about their owners in an effort to combat money laundering, drug trafficking and terrorism.

The court’s brief order gave no motivation, which is typical when judges rule on emergency requests. The ruling was provisional, reinstating the law while his challenge progresses.

Critics say the law, the Corporate Transparency Act of 2021, is unnecessarily burdensome, a threat to privacy and an unconstitutional federal intrusion into matters historically regulated by states.

The challenge to the law was brought by a gun dealer, a technology company, a dairy, the Libertarian Party of Mississippi and the National Federation of Independent Business, which was the lead plaintiff in the first major challenge to the law on affordable care. As in that case, the plaintiffs in the transparency law challenge argued that the Constitution’s Commerce Clause did not authorize Congress to regulate what they characterized as inaction rather than economic activity.

Opponents added that the law covers tens of millions of small entities, including homeowners’ associations and family trusts. Complying with the law will collectively cost tens of billions of dollars, they said.

Judge Amos L. Mazzant of the U.S. District Court in Sherman, Texas, blocked the law nationwide, saying Congress had exceeded its constitutional authority.