Earlier this week the Senate Committee on Commerce, Science, and Transportation postponed  a scheduled hearing on a bill that would limit some uses of facial recognition by the  Transportation Security Administration (TSA), while authorizing the TSA to carry out “identity verification” of airline passengers and take mug shots of all those air travelers who don’t show an “approved identification document”.

The original version of the “Traveler Privacy Protection Act” as it was introduced in 2023 would have imposed a straightforward prohibition on use of facial recognition by the Transportation Security Administration (TSA) without explicit Congressional authorization: “The Administrator [of the TSA] may not, for any purpose, use facial recognition technology or facial matching software in any airport unless such use is expressly authorized by an Act of Congress enacted after the date of the enactment of this Act.”

It is, of course, a sign of how far beyond its legal authority the TSA has already gone that Congress would need to consider a bill to explicitly prohibit the TSA from exceeding the authority it has been granted by Congress. But that’s the situation we’re in.

The revised version of the bill put forward in 2024 as an amendment to the Federal Aviation Administration reauthorization act and reintroduced as a standalone bill in 2025 would authorize use of facial recognition by the TSA for “confirmation of the identity of a passenger before admittance to the sterile area of the airport,” provided travelers are given notice that being photographed is voluntary and that the TSA “does not subject passengers who choose the opt-out option to discriminatory treatment, additional screening requirements, less favorable screening conditions, or other unfavorable treatment.”

The revised bill would also mandate that the TSA, “for each passenger who chooses the opt-out option, performs identity verification using an approved identification document and without collecting any biometric information from such passenger… The [opt-out] option … does not apply with respect to a passenger— (i) who does not provide an acceptable form of identification at a security checkpoint; and (ii) whose identity the Administrator may need to verify through alternative measures to enter the sterile area.”

This bill would thus impose a new obligation on the TSA to carry out “identity verification”, leaving it ambiguous what (if anything) is required of travelers. But as we noted when this revised language was first introduced last year, despite the ambiguity in the bill,  it would for the first time create at least an arguable statutory basis for the TSA to claim — as it undoubtedly would claim, in a shift from its consistent admission to date in court that no law or regulation requires air travelers to show any ID — that airline passengers are required to identify themselves in some fashion, either through an approved ID document or facial recognition.

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The US Department of the Treasury has announced that it plans not to enforce the provisions of the Corporate Transparency Act (CTA) that were to go into effect next month requiring owners and principals of all corporations to file copies of government-issued ID credentials, including photos, with the Financial Crimes Enforcement Network (FinCEN).

The Treasury Department also says it plans to propose revisions to the CTA regulations that would limit the ID-filing requirement to principals of “foreign reporting companies”, a term that doesn’t appear in the statute and isn’t defined in the announcement.

We don’t want the government to try to enforce the CTA reporting requirement. But if the law isn’t going to be enforced, it should be repealed, not left on the books as a Sword of Damocles available to prosecutors to threaten or persecute disfavored businesspeople. And the proposed regulations, redefining which entities must file CTA reports, would appear to be contrary to the explicit language of the CTA statute as to who must file.

Press releases like this one form the Treasury Department aren’t binding on Federal prosecutors, even now, much less in the future. Regardless of this announcement, nobody subject to the CTA is safe from prosecution if they don’t file the reports required by the law.

There are few legal constraints on prosecutorial discretion. Many laws — including those that impose reporting and filing requirements — are routinely ignored and unenforced. Police and prosecutors, especially those with malign intentions, love to have laws like this on the books that everybody violates. That allows anyone to be prosecuted at any time, with the government claiming truthfully that it is merely “enforcing the law”. Only in rare cases is the government required to explain the real reasons why some people are prosecuted while others who are known to have violated the same laws are not.

To word it a little differently, the combination of unlimited prosecutorial discretion and universally violated laws is central to the phenomena of pretextual police action and pretextual prosecution. An essential part of the solution is the repeal of unenforced laws.

We welcome, in the short term, the nonenforcement of CTA reporting rules. And we urge Congress to address the problem, promptly, by repealing the CTA in its entirety.

The US Supreme Court has stayed the nationwide injunction against enforcement of a Federal law requiring owners or principals of all corporations to submit copies of ID documents, including photos, to the  Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury.

The Supreme Court’s ruling leaves business owners and officers, and FinCEN, scrambling to figure out what to do — at a moment when how the Federal government might use personal information in ways that weren’t anticipated when it was collected is a hot topic.

The original deadline for filing of Beneficial Owner InformatIon (BOI) with FINCEN was to be January 1, 2025. But by then, multiple lawsuits against the Corporate Transparency Act had been filed, and the judge in one of those caseS had issued a nationwide injunction against enforcement of the law while the lawsuits were pending.

The Supreme Court’s decision to overturn that injunction allows the lawsuits and appeals to continue, but in the meantime allows the government to enforce the filing requirement.

Following the stay of the District Court injunction pursuant to the Supreme Court’s decision, FinCEN announced a new deadline of March 21, 2025, for filing of BOI (including copies of IDs) for most companies. Another injunction from a different judge in a different Federal court district remains in effect, but it applies only to the plaIntiffs in that case.

FinCen estimates that collecting and submitting the required information will require, on average, 90 to 650 minutes per company. That’s a far from trvial burden for, for example, a  sole proprietor with a personal LLC. The cost could be much higher for even a small business thta has to hire a lawyer to figure out who is considered a “beneficial owner” or officer subject ton the reporting requirement.

Those who search for information on the Web about BOI filing requirments are likely to be led to the flood of scam sites set up to rip off would-be BOI filers with excessive facilitation fees as intermediaries, while harvesting personal information for identity theft.  What does it say about the purposrted justification for this rule that the requirements of the “Financial Crimes Enforcement Network” are providing a windfall for financial fraudsters?

The purported limitations and controls on access to and use of BOI filings ring hollow in light of the access to and use of personal information from Federal databases in unanticipated ways and by entities and by newly-created entities with ambiguous authority, such as the White House Department Of Government Efficiency (DOGE).

With concern growing about how this informaiton might be misused, legislation is pending in Congress to repeal the Corporate Transparency Act or postpone its effective date.

On February 10th, the House of Representatives approved H.R. 736, a bill to extend the BOI filing deadline until January 1, 2026, by a unanimous vote of 408 to 0. The same or a similar bill is likely to be introduced in the Senate. Postponement might give time for the pending appeals in the lawsuits challenging the law to play out, or for Congress to repeal the law.

A bill to repeal the Corporate Transparency Act and the BOI reporting requirement has been introduced in the House as H.R. 425 and in the Senate as  S. 100, “Repealing Big Brother Overreach Act”. No action has yet been taken on this bill in either chamber.

A Federal District Court in Texas has issued a nationwide injunction against enforcement of the Corporate Transparency Act (CTA) of 2021.

This injunction is only temorary, pending a decision by the court on the merits of a lawsuit challenging the Constitutionality of the law, which could take months or years. But until that ruling, the preliminary nationwide injunction stays the January 1, 2025, deadline for officers and owners of all types of corporations to obtain ID documents from government agencies and submit copies of those documents, including photos, to the Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury.

Another US District Court in Alabama has already ruled that the Corporate Transparency Act is unconstitutional. But that ruling only applied to the plaintiffs in that case.

The Texas District Court’s detailed ruling on the motion for a preliminary nationwide injuction focuses primarily on issues of federalism. It doesn’t mention the issue of corporate officers or owners who don’t have any of the required ID documents, or the implications of requiring  mug shots as well as document numbers and other written information.

The government argued that the plaintiffs in the case against the CTA had not suffered sufficient damage to give them a cause of action, because the reporting burden would be “de minimus” (minmal). The Court rejected that argument, noting that, according to the regulations implmenting the CTA reporting requirement, ” FinCEN estimates that the total cost of filing BOI [Beneficial Owner Information] reports is approximately $22.7 billion in the first year and $5.6 billion in the years after.”

The Court noted with a footnote that, “FinCEN also estimates that it will take approximately twenty minutes to read a beneficial ownership report form and understand it, thirty minutes to collect information about a company’s beneficial owners, and twenty minutes to fill out and file the report, resulting in a seventy-minute endeavor. But the Court notes that as a practical matter, it takes far longer than seventy minutes simply to read the CTA and Reporting Rule alone.”

What we find espcially significant and encouraging in this ruling is that it recognizes explicly that requiring ID is a law enforcement and investigatory device — as FinCEN’s very name, the Financial “Crimes Enforcement” Network, makes clear:

In other words, the CTA is a law enforcement tool—not an instrument calibrated to protect commerce; an exercise of police power, rather than a regulation of an activity…. The CTA regulates reporting companies, simply because they are registered entities, and compels the disclosure of information for a law enforcement purpose.

The Court rightly rejected the government’s argument that mandatory reporting of identifying information (and photos, although that wasn’t mentioned) about all corporate principals is “useful” for law enforcement. Unconstitutional general warrants, dragnet surveillance, or suspiconless, warrantless, house-to-house searches would undoubtedly enable the government to find evidence of crimes, some of which would otherwise have gone undetected, in many homes. But the effectiveness of these police tactics, from the point of view of the police, does not make them Constitutional.

FinCEN hasn’t updated its website yet to mention the nationawide injunction. The Texas case and other legal challenges to the CTA remain pending, and the injunction is likely to be appealed. For now, however, you can ignore the CTA reporting requirements and the January 1, 2025, compliance deadline.