CAI has initiated legal action against the U.S. Department of the Treasury, Secretary Janet Yellen, and the director of the Financial Crimes Enforcement Network to safeguard its members from the onerous and unnecessary obligations of the Corporate Transparency Act.
The legislation introduces fresh reporting mandates for various entities, including community associations. It mandates that volunteer board members of condominiums, homeowners associations, and housing cooperatives furnish sensitive personal data to the federal government. While these requirements aim to combat illicit activities like terrorism financing and money laundering, the Treasury Department’s broad implementation of the law affects organizations such as community associations, which are highly unlikely to be involved in such activities. CAI believes that subjecting community associations to the Corporate Transparency Act constitutes an overreach and may potentially be unconstitutional.
Despite collaborating with the Treasury Department for over a year to secure a regulatory exemption for community associations, CAI’s efforts have been fruitless. With the law’s implementation deadline for existing associations swiftly approaching on Jan. 1, CAI has deemed it necessary to pursue legal action to defend community association rights and secure their exemption from the act.
Alongside the complete complaint, CAI is submitting a motion for a preliminary injunction. This injunction, a temporary measure, aims to maintain the current state of affairs until the court adjudicates the case.
The lawsuit seeks to:
- Assert that the Corporate Transparency Act does not pertain to community associations, including condominiums, homeowners associations, and housing cooperatives.
- Challenge FinCEN’s choice not to exempt CAI members from the act.
- Request a judicial review of the denial of exemptions, which CAI deems both illegal and unconstitutional.
CAI is dedicated to shielding its members from regulations that jeopardize privacy and deter volunteerism within community associations. The lawsuit is pursued to ensure that communities can operate without unnecessary and burdensome regulations.
Recognition is extended to Brendan Bunn, Esq., CCAL fellow, President of the College of Community Association Lawyers, and Shareholder at Chadwick, Washington, Moriarty, Elmore & Bunn (Fairfax, Va.), as well as Ed Allcock, Esq., CCAL fellow, Past President of the College of Community Association Lawyers, and Shareholder at Allcock & Marcus (Braintree, Mass.) for their significant contributions to this initiative.
To support the cause, you can:
- Maintain your CAI membership to stay informed about the case’s progression.
- Urge other associations in your area to become CAI members.
- Bookmark www.caionline.org/CTA for updates.
- Contribute to CAI’s legal fund to assist with litigation expenses.
- Contact your Congressional representatives to express backing for H.R. 9045, which aims to exempt community associations from the Corporate Transparency Act.
The National Small Business Association’s successful lawsuit resulted in its members being exempted from the act’s requirements. CAI has learned that “association standing” shields all organization members. If CAI’s lawsuit succeeds, exemptions may apply only to community associations affiliated with CAI. It is advised to maintain your membership in good standing.
Updates on the lawsuit’s progress will be communicated, and in the interim, visit www.caionline.org/CTA for FAQs.
Thank you for your ongoing support as we strive to safeguard the interests of our members and communities nationwide.
