On Aug. 11, the U.S. Treasury Department’s Financial Crimes Enforcement Network issued a final rule removing requirements for U.S. companies and U.S. persons, including community association board members, to report beneficial ownership information to FinCEN under the Corporate Transparency Act. The final rule will be effective pending publication in the Federal Register.
In this press statement, FinCEN also announced it will delete previously reported information by U.S. persons, including community association board members, who had previously disclosed personal information to the department, now exempt from the reporting requirements, from the beneficial ownership information database.
Last year, FinCEN issued an interim final rule removing the requirement for U.S. companies and U.S. persons to report beneficial ownership information to FinCEN under the CTA. Through this interim final rule, all entities created in the United States, including those previously known as domestic reporting companies and their beneficial owners will be exempt from the requirement to report BOI to FinCEN. This interim ruling served as a temporary, binding set of rules until this more comprehensive final rule was issued and published.
CAI has advocated for community association board members to be exempt from the CTA’s reporting requirements since the law’s implementation raised significant compliance and privacy concerns for associations and their volunteer leaders.
As part of its multi-year effort, CAI engaged with federal policymakers and FinCEN, submitted regulatory comments, mobilized advocates, and educated community association leaders and professionals about the evolving requirements. In September 2024, CAI also filed a federal lawsuit against the U.S. Treasury Department challenging the application of the CTA to community associations seeking relief.
Community associations are typically governed by volunteer homeowners elected to serve on their boards. CAI maintained these volunteer leaders were unintentionally caught within a law intended to combat money laundering and other illicit financial activity and should not be subject to requirements designed to identify the beneficial owners of companies.
Under the newly issued final rule:
- U.S. companies and U.S. persons, including community association board members, are permanently exempt from beneficial ownership information reporting requirements.
- U.S. persons who obtained FinCEN identifiers are not required to update or correct information previously provided to FinCEN.
- FinCEN will implement a process to delete previously reported information that it reasonably believes was provided by U.S. persons, including information previously submitted by community association board members.
- Certain foreign entities registered to do business in the United States remain subject to reporting requirements for foreign individuals.
These changes are regulatory interpretations and exemptions under the CTA, not a repeal of the federal act. The CTA remains on the books, and the final rule is a binding Treasury regulation that alters how the law is applied in practice. The statute remains in federal law unless Congress explicitly repeals it. The Treasury Department cannot repeal the statute by itself. If Congress wants to remove the CTA entirely, it needs to pass and enact legislation to repeal it.
In January 2025, Ohio Rep. Warren Davidson introduced H.R. 425 – Repealing Big Brother Overreach Act. If passed, it would fully repeal the CTA. This bill currently has 191 cosponsors in the House and was amended and approved in April by the House Financial Services Committee. If passed, the bill will fully repeal the CTA and require FinCEN to delete data from BOI filings for Americans and entities that are not reporting companies within 90 days of the bill’s adoption.
This bill will now be sent to the House floor for consideration. Though this final regulatory rule has been issued, CAI needs you to continue to contact your representative to urge them to support H.R. 425 and remove the CTA from federal law.
Please join CAI in supporting this piece of legislation by participating in CAI’s call to action here.
For more information on CAI’s multi-year initiative to exempt community association board members from these reporting requirements, please visit our webpage here.
