On February 17, the United States District Court for the Eastern District of Texas granted the government’s motion for stay a nationwide injunction halting enforcement of the Corporate Transparency Act in Smith v. United States Department of Treasury. The Court cited the Supreme Court of the United States’ decision to stay the preliminary nationwide injunction in the Texas Top Cop Shop, Inc., matter as precedent for their decision.
This was the last remaining nationwide order pausing beneficial ownership reporting requirements. Due to this new court order, reporting requirements under the act are reinstated for applicable community associations.
On February 19, FinCEN issued the following guidance that the Department of the Treasury recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, and FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies.
According to FinCEN, for the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.
CTA Lobbying and Advocacy Efforts Continue—Contact your Members of Congress
While the fight continues in federal courts, Congress is addressing legislative initiatives to delay the act. H.R. 736 – Protect Small Businesses from Excessive Paperwork Act of 2025 was introduced by Representative Zachary Nunn (R-IA-3) and S. 505 – A bill to amend title 31, United States Code, to modify the deadline for filing beneficial ownership information reports for reporting companies formed or registered before January 1, 2024 was introduced by Senator Tim Scott (R-SC). If passed, these bills will delay the act’s implementation for pre-existing entities to January 1, 2026. H.R. 736 was passed by a vote of 408-0 on February 10, 2025, and was sent to the Senate Banking, Housing, and Urban Affairs Committee for consideration, where its companion bill, S.505, was also introduced.
ACT NOW: Please, reach out to your senators to support H.R. 736 and S. 505 via this link and share this important request with your neighbors.
Status of CAI’s CTA Lawsuit
While these lawsuits continue to go through the judicial process, CAI’s lawsuit is still in play. On Sept. 10, 2024, CAI filed a lawsuit against the U.S. Department of Treasury, Secretary Janet Yellen, and the director of FINCEN challenging the application of the act on community associations. CAI is protecting its members from the burdensome and unnecessary requirements of the act.
On Oct. 24, 2024, CAI’s preliminary injunction request was denied by a federal judge. CAI appealed the court’s denial on Nov. 4, 2024, and on Nov. 12, filed its opening brief of the appeal in the fourth circuit urging a pause on reporting requirements for community associations while this lawsuit is adjudicated. The government responded to CAI’s appeal on February 7, and CAI has until February 28 to file its reply.
This is a developing issue. Association boards should remain vigilant and informed on these ongoing updates.
>>>Access additional CAI updates and resources on the Corporate Transparency Act.
If you have any questions, please contact CAI’s Government & Public Affairs team at government@caionline.org.
FinCen in their statement restarting CTA BOIR submissions said,
“Notably, in keeping with Treasury’s commitment to reducing regulatory burden on businesses, during this 30-day period FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting.”
I think that this statement opens up the possibility of FinCen being willing to seriously consider making HOAs exempt from CTA.
I hope that CAI’s legislation guru’s have picked up on that statement and are already strategizing their lobbying effort for that purpose.
That said, HOAs need a critical procedure that so far FinCen has not provided and doesn’t appear to understand its need. Therefore, I’m also hoping that CAI will be lobbying FinCen to immediately create a form for individuals FinCen registrants to deregister themselves from their FinCen registration when they are no longer beneficial owners. For example, once an HOA board member is no longer on the board, they’re no longer beneficial owners. Rather than have to keep updating their registrations for life, they should be able to deregister themselves. The lack of such a mechanism is maddening to many CAI members as can be seen in the CAI open forum.
An entity would simply need to submit an update / amendment.