On Jan. 10, CAI filed an amicus brief with the U.S. Supreme Court in Texas Top Cop Shop, Inc., et al, v. Merrick Garland, et al. Read the brief here.
This case arises from a constitutional challenge by the National Federation for Independent Business regarding the Corporate Transparency Act, a federal law requiring certain business entities to register with the Treasury Department’s Financial Crimes Enforcement Network. The case was filed in the United States District Court for the Eastern District of Texas.
A preliminary injunction in the case was issued in December 2024 that paused reporting requirements under the act while the lawsuit is adjudicated. The government appealed the injunction to the Fifth Circuit, and a panel of judges affirmed the ruling. The government then filed a motion for stay with the U. S. Supreme Court. CAI’s amicus brief was filed in support of the preliminary injunction.
Many community associations will be impacted by this new law and will have to file certain beneficial ownership information with FinCEN. The filing deadline for existing corporations set for Jan. 1 is currently on pause due to the injunction.
The act is intended to improve detection of certain suspicious activities carried out by business entities such as money laundering and terrorist financing. CAI supports that goal but does not believe the act should apply to local, volunteer-driven, nonprofit organizations that exist with the primary purpose of maintaining communities and providing services to residents. This amicus brief allowed CAI to highlight the negative impacts the act will have on the community association industry and illustrate the act’s reach is impermissibly broad.
CAI members and fellows in CAI’s College of Community Association Lawyers who drafted this critical brief are: Edmund Allcock with Allcock Marcus in Braintree, Mass.; Brendan Bunn with Chadwick, Washington, Moriarty, Elmore & Bunn in McLean, Va., and Robert Diamond with Reed Smith in Fairfax, Va. We thank these individuals for their time and dedication to this issue.
CAI continues to track movements in the federal courts over challenges regarding the act. CAI also contacted the U. S. Department of Treasury to urge an administrative delay due to the chaos and confusion created by these recent court rulings and Congress’ decision not to take legislative action to extend the filing deadline.
This continues to be a developing issue. Association boards should remain vigilant and informed on these ongoing updates.
Access additional CAI resources on the Corporate Transparency Act.
CAI educates courts about important legal and policy issues in cases related to the community association industry through the amicus curiae program. To learn more or to submit a request for an amicus brief, contact Phoebe E. Neseth, Esq., at pneseth@caionline.org, or visit our site.