Who could oppose cracking down on money laundering by terrorists, drug dealers and human traffickers? Especially if all it cost was more paperwork?

That’s the argument for the Corporate Transparency Act, which the House Financial Services Committee passed in June. Its boosters frame the law in national security terms to override pesky questions about efficacy and costs. The reality is that the law would hit small businesses with another compliance burden, their confidential information would become less secure, and real criminals...