CAI Board of Trustees Approves Legal Action Against Corporate Transparency Act
Community Financials, a Business Partner member of Community Associations Institute, is pleased to share the latest information with our network. In June 2024, the Community Associations Institute Board of Trustees voted to file a lawsuit seeking an exemption for community associations from the burdensome provisions of the Corporate Transparency Act. This action further underscores the institute’s strong commitment to the protection of community associations as a unique form of housing and to its membership.
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Understanding the Issue
The Corporate Transparency Act requires specified entities to report information on beneficial owners to the U.S. Department of the Treasury’s FinCEN, aimed at combating money laundering and terrorist financing. This noble idea underlying the CTA has quickly raised deep concern among CAI members due to the inclusion of community associations under its rule.
Challenges Faced by Community Associations
Community associations, in contrast to traditional corporations or small businesses, are non-profit entities governed by volunteers from their roster of homeowners. According to CAI, imposing the same reporting requirements on these associations as those imposed on for-profit associations would further burden them. The gathering of personal information relative to compliance will involve board members and persons with significant control, which CAI argues may deter volunteerism and cause high administrative costs for associations.
Why the Lawsuit?
The lawsuit challenging the application of CTA requirements to community associations is forthcoming against the U.S. Department of Treasury. CAI’s contention is that community associations were unintended targets of legislation largely directed toward commercial enterprises, not community governance.
How We Can Support
Our involvement is critically needed at this time. Following are a few ways we can support CAI’s efforts:
Stay Informed:Â CAI has created a webpage, where information on the lawsuit and any other related developments will be posted there. News items relating to the progress of the legal proceedings will be regularly added to that page.
Join Advocacy Efforts: Reach out to state legislators to support the CAI’s position. Mention that elected officials representing community associations through the CTA have encountered specific challenges and ask for their support in securing an exemption. Additionally, contact local representatives to endorse CAI’s stance on the act’s requirements.
Join Community Discussions: CAI is hosting online forums and webinars for discussions related to the implications of the lawsuit and what it means. Our experience and insight will inform CAI’s advocacy strategy.
Raise Awareness: Share details of the lawsuit with stakeholders in the community. The more who know, the more support CAI gets in fighting for community associations.
Join the Cause: Fight for Fairness and Effective Regulation
CAI will continue to work to ensure community associations are properly represented in their advocacy efforts, seeking parity with other federal regulations. CAI will keep members apprised of the lawsuit through its website, email communications, and special briefings. Together, we will work for a resolution that not only protects the integrity of community governance but is effective in addressing national security concerns as well.
Join CAI in this crucial effort to protect community associations from excessive regulatory burdens. The participation will go a long way toward an outcome that is fair and reasonable. To stay informed and up-to-date on this lawsuit visit this webpage.