Corporate Transparency Act Update: Key Hearing Held in Lawsuit

By Dawn Bauman
Image Description

On Oct. 11 the Alexandria District Court held a hearing for preliminary injunction in Community Associations Institute v. U.S. Department of Treasury. CAI anticipates a ruling on the request shortly. This case is a critical component of CAI’s fight to protect community associations from burdensome requirements mandated under the Corporate Transparency Act.

CAI Membership May Be Needed for Exemption from Corporate Transparency Act

Based on an interpretation in a similar case filed by the National Small Business Association, association standing” may protect all members of the organization. If CAI’s lawsuit is successful in exempting community associations from the act, it is possible the exemption may only apply to community associations that are CAI members.

CAI recommends associations sign up for a homeowner leader group membership. Up to 15 board members may participate, which should cover most community association boards, visit www.caionline.org/join.

CAI’s Three-Pronged Approach to Fighting the Corporate Transparency Act

CAI is committed to a comprehensive strategy in its fight to exempt community associations from the act.

  • Lawsuit. CAI v. U.S. Department of Treasury challenges the act’s application to community associations.
  • Regulatory Advocacy. Arguing that volunteer entities such as community associations do not pose a risk to federal efforts to combat money laundering and terrorist financing activities, CAI continues to appeal to the Financial Crimes Enforcement Network and the Treasury Department to secure an exemption for community associations
  • Advocacy Legislative Efforts. CAI continues to advocate for the passage of HR 9045, legislation that specifically exempts community associations from the act. This bill is the only piece of legislation in Congress that provides an exemption to any sector.

Preliminary Injunction Hearing. The hearing requesting a preliminary injunction was a significant step in the case. While a decision is pending, the arguments presented underscore the potential hardships community associations may face under current regulations. The court’s decision will determine whether enforcement of the act will be halted while the case proceeds. CAI will keep members informed of any updates.

CAI is hopeful for a favorable outcome in the case. Until a decision is reached, community associations must comply with the act by Jan. 1. We encourage all community associations to review current requirements and prepare accordingly. Stay tuned for more updates as we work tirelessly to exempt community associations. For more information and resources, visit www.caionline.org/cta.

Get More Expert Advice

Join CAI’s online community for access to the industry’s most in-demand community association resources.

Thousands of your peers are sharing advice.

JOIN NOW
Dawn Bauman

Dawn Bauman, Chief Strategy Officer. As CAI’s lead advocate for federal and state legislative and regulatory affairs, Dawn works with volunteer leaders throughout the country serving on CAI legislative action and government affairs committees to advocate for strong and sensible public policy for America’s community associations.