Just when you think that things might be about to turn around with regard to the explosion of unbelievably stupid laws and regulations to harass and annoy the people, along comes another one that’s stupid enough to top them all.  This one has sprung up seemingly out of nowhere in the past few weeks, in notices that have gone out among the New York co-op and condo communities.  But the law’s application is far broader than just these communities.  I suspect that many readers have received such notices in many diverse contexts.

The law in question is a federal statute called the Corporate Transparency Act.  Have you heard of it?  The Act arises out of a brilliant idea coming from an arm of the federal Treasury Department called the Financial Crimes Enforcement Network, or FinCEN.  FinCEN’s mission is to stamp out crimes involving money.  Unfortunately for FinCEN, the bad guys keep figuring out ways to use and/or transfer money in ways that FinCEN can’t keep track of, something they refer to as “money laundering.”  But FinCEN thinks they have the answer:  just track everything that all of the people do all of the time.  Surely, that will work!

Somewhere along the line, FinCEN noticed that the various state Secretaries of State, who create and register corporations and LLCs, often do not keep any record of who owns these entities at any moment in time.  (Why should they?  It’s a lot of work to no purpose.). Entities with undisclosed ownership are sometimes referred to as “shell companies.”  Sometimes, bad guys will use such “shell companies” without disclosing their involvement to anybody.  Shocking!

Well, FinCEN knows just how to put an end to such chicanery:  simply require every corporate entity in the country to disclose its owners and directors to the Treasury Department, and continuously update same.  That way, FinCEN can create a massive data base to surveil everybody.  Problem solved.