Background

As enacted, the CTA required non-exempt U.S. entities and non-exempt foreign entities registered to do business in the United States to submit BOI reports to a confidential database maintained by the U.S. Department of the Treasury, Financial Crimes Enforcement Network (FinCEN). The CTA took effect Jan. 1, 2024.

The CTA’s status subsequently shifted multiple times.¹ On Dec. 3, 2024, a Texas district court in Texas Top Cop Shop, Inc. v. McHenry preliminarily enjoined the CTA and its BOI reporting rule (Reporting Rule) on a nationwide basis. On Feb. 18, 2025, BOI reporting requirements were reinstated. Thereafter, on March 21, 2025, FinCEN issued an Interim Final Rule exempting domestic companies and U.S. beneficial owners from BOI reporting requirements. As a result, non-exempt foreign reporting companies were required to file their BOI reports by April 25, 2025. 

Eleventh Circuit Ruling

On March 1, 2024, in Nat'l Small Bus. United v. Yellen the U.S. District Court for the Northern District of Alabama found the CTA unconstitutional on the grounds that it exceeds Congress’ enumerated powers.² The district court rejected arguments that the CTA constituted a valid exercise of authority under the Commerce Clause and Necessary and Proper Clause of the U.S. Constitution, finding that the CTA does not regulate commercial activity on its face and applies to entities lacking a nexus to interstate commerce. The district court further held that “‘even if’ the CTA’s provisions were ‘necessary,’ ‘such an expansion of federal power is not a ‘proper’ means for making those [policy goals] effective.’”³ The district court’s injunction, however, applied only to the plaintiffs, namely the National Small Business Association and its members. The trade group’s membership comprises more than 65,000 businesses nationwide.

On Dec. 16, 2025, a panel of the U.S. Court of Appeals for the Eleventh Circuit reversed the ruling in Yellen, holding that the CTA is constitutional.⁴The Eleventh Circuit found that “by effectively prohibiting anonymous business dealings, the CTA facially regulates economic activities having a substantial aggregate impact on interstate commerce.”⁵ The Eleventh Circuit held that “as a uniform and limited reporting requirement, the CTA does not facially violate the Fourth Amendment.”⁶

The Eleventh Circuit further clarified that the Interim Final Rule “still requires foreign companies to report ownership information except as to American owners”⁷ and remanded the case to the district court for further proceedings consistent with its opinion.

Although the ruling permits CTA enforcement against National Small Business Association members, FinCEN’s Interim Final Rule currently exempts domestic companies and U.S. beneficial owners. Therefore, National Small Business Association members remain precluded from BOI reporting requirements. FinCEN has not issued any statement or guidance regarding the Eleventh Circuit ruling to date.

Final Rule Status

FinCEN accepted comments on its Interim Final Rule through May 27, 2025. In the Interim Final Rule, FinCEN expressly stated that it would “assess the exemptions, as appropriate, in light of [the] comments and intends to issue a final rule this year.”⁸ FinCEN Director Andrea Gacki reiterated this position in written testimony to Congress on Sept. 9, 2025, confirming FinCEN’s intent to issue a final rule in 2025.

However, in a government status report filed on Dec. 1, 2025, in an appeal currently pending before the U.S. Court of Appeals for the Fourth Circuit,⁹ FinCEN stated that it “is currently reviewing comments regarding the [I]nterim [F]inal [R]ule as part of its final rulemaking. Although the [I]nterim [F]inal [R]ule stated that FinCEN ‘intend[ed] to issue a final rule this year,’¹⁰ FinCEN’s progress has been delayed by various factors, including the recent lapse in appropriations.”

FinCEN has not issued the final rule to date.

Takeaways

The CTA and the Interim Final Rule remain in effect. Domestic and foreign companies may wish to continue monitoring FinCEN guidance, particularly regarding FinCEN’s final rule. Non-exempt foreign reporting companies should continue to comply with BOI filing deadlines, and stakeholders should stay alert for any updates regarding the scope, exemptions, or timing of the forthcoming final rule.