Corporate Transparency Act

IMPORTANT UPDATE

A preliminary injunction was NOT GRANTED in this case, meaning your board, as this case is being litigated and advocacy efforts continue, must report BOI information to FinCEN by January 1, 2025, or face financial and criminal penalties.

While this decision is not the outcome we had hoped for, it does not mark the end of our efforts. CAI’s advocacy efforts are continuing and the legal team is considering next steps; including a potential appeal to the judges ruling on the preliminary injunction. The lawsuit itself will continue to go through the legal process.

Corporate Transparency Act

The Corporate Transparency Act (CTA) was signed into law Dec. 2020 and is now in effect for many community associations. This law will require community associations with fewer than 20 employees and less than $5 million in annual revenue to disclose beneficial owners’ information to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). 

While we support the goal of stopping money laundering and funding schemes for terrorist activity, this is not good public policy for community association boards of directors. CAI believes community associations were unintendedly caught up in this law which is intended for corporations laundering money for terrorist activity.  Failure of a volunteer community association boards to comply—intentional or not—could result in up to $10,000 in fines and up to two years in prison. 

Video Transcript

CAI's Lawsuit:

On September 10th, CAI filed a lawsuit against the U.S. Department of the Treasury, Secretary Janet Yellen, and the director of the Financial Crimes Enforcement Network, challenging the application of the Corporate Transparency Act on community associations. This action is being taken to protect our members from the burdensome and unnecessary requirements of the Corporate Transparency Act. Both the lawsuit complaint and motion for preliminary injunction can be found here:

Community Associations Institute v United States Department of Treasury Complaint (Filed September 10, 2024)

Community Associations Institute v United States Department of Treasury Complaint (Filed September 10, 2024)
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Community Associations Institute v United States Department of Treasury Motion for Preliminary Injunction (Filed September 10, 2024)

Community Associations Institute v United States Department of Treasury Motion for Preliminary Injunction (Filed September 10, 2024)
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Defendant's Opposition to Motion for Preliminary Injunction (Filed October 2, 2024)

Defendant's Opposition to Motion for Preliminary Injunction (Filed October 2, 2024)
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CAI Reply In Support Of Preliminary Injunction Motion (Filed October 7, 2024)

CAI Reply In Support Of Preliminary Injunction Motion (Filed October 7, 2024)
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Judge Ruling on Preliminary Injunction (Filed 10/24/24)

Judge Ruling on Preliminary Injunction (Filed 10/24/24)
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FAQs And Resources

Want to learn more about CAI's lawsuit?
Check Out CAI's FAQ!
Want to learn more about the Corporate Transparency Act and its impact on community associations?
Check out CAI's guidance document!
FinCEN's FAQ Website HOA Guidance- HOA Relevant Items are C.10, C.17, D.1, and F.5.

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* CAI Letter to FinCEN - Requesting Community Association Exemption
* Coalition Letter in Support of S. 3625 - the Protect Small Business and Prevent Illicit Financial Activity Act
CAI Letter Coalition Letter
FinCEN Report Blog- FinCEN Confirms Most Homeowner Associations Will Need to File Under the CTA
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Includes FAQs, resources on how to contact FinCEN, newsletter, website, and email templates, sample social media posts, and sample social media images.

View Resource
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Act Now!

Tell congress to support H.R. 9045 and exempt community associations from reporting requirements!

Take Action

NOTE: Should community associations be prepared to file by Dec. 31 if CAI's lawsuit is not resolved or the law has not changed?

Yes. Community associations should be prepared to comply with the act and file the required beneficial ownership information by Dec. 31 if the lawsuit is not resolved or the law has not been amended. While the CAI is actively pursuing legal action to seek an exemption, it is prudent for associations to prepare to comply to avoid potential penalties and ensure they meet all legal requirements.

CAI Membership

We learned from the National Small Business Association (NSBA) lawsuit that “association standing” protects all members of the organization in the lawsuit. If CAI’s lawsuit is successful in exempting community associations from the Corporate Transparency Act, it is very possible the exemption will only apply to community associations that are members of CAI.

For the time being, CAI recommends that your association sign up for a Homeowner Leader membership, Group option. Up to 15 board members may be listed under this membership option, which should be broad enough to cover the majority of community association boards.

Join CAI Today

Help CAI Fight The Corporate Transparency Act!

Notice: Federal Court Rules Corporate Transparency Act Unconstitutional

On Friday, March 1, a federal court ruled the Corporate Transparency Act (CTA) unconstitutional. The federal government appealed the decision on Monday, March 11. Meanwhile, the Financial Crimes Enforcement Network (FinCEN) has provided notice that, as a result of this opinion, the government is not currently enforcing the Corporate Transparency Act against the plaintiffs in that action: Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024). Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time. CAI wanted to share this news with you immediately and we will provide additional details as they become available.

Other Current Corporate Transparency Act Lawsuits

Small Business Association of Michigan et al v. Yellen

Small Business Association of Michigan (SBAM)- Small Business Association of Michigan et al v. Yellen et al 1:2024cv00314
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National Small Business Association et al v. Yellen

National Small Business Association (NSBA)- National Small Business Association et al v. Yellen 5:22-cv-1448-LCB
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Texas Top Cop Shop et al v. Garland et al

National Federation of Independent Business (NFIB)/Wyoming dairy/the Mississippi Libertarian Party and two small businesses- Texas Top Cop Shop et al v. Garland et al 4:24-CV-00478
Learn more
William Boyle v. Yellen

William Boyle (Individual)
William Boyle v. Yellen 2:24-cv-00081

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Black Economic Council of Massachusetts et al v. Yellen

Black Economic Council of Massachusetts (BECMA), the African Community Economic Development of New England (ACEDONE) and three business owners in Massachusetts- Black Economic Council of Massachusetts et al v. Yellen et al 1:24-cv-11411
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Taylor et al v. Yellen

Utah business owner Phillip Taylor and the nonprofits The People Restored, Ranchers Cattlemen Action Legal Fund United Stockgrowers of America, and Utah OSR Land Cooperative- Taylor v. Yellen, No. 2:24-cv-00527
learn more
Gerald Earl Cummings, II, Lindsay Berschauer, Tayler Hayward, Lisa Ledson, Katerina Eyre, Michael Firestone and Thomas Reilly

Gerald Earl Cummings, II, Lindsay Berschauer, Tayler Hayward, Lisa Ledson, Katerina Eyre, Michael Firestone and Thomas Reilly- Firestone et al v. Yellen et al 3:2024cv01034

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Robert J. Gargasz Co., L.P.A. and Robert J. Gargasz

Robert J. Gargasz Co., L.P.A. and Robert J. Gargasz- Robert J. Gargasz Co., L.P.A. et al v. Yellen 1:2023cv02468
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Hotze et al v Treasury et al (2:24-cv-00210-Z Filed 9/26/24)

Hotze, Rogers, Ramsland, Wallis, and the Association of American Physicans and Surgeons v Treasury et al (2:24-cv-00210-Z Filed 9/26/24)
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