The Corporate Transparency Act (“CTA”) has been looming over community associations since its enactment January 1, 2021, but the government has recently taken new steps to reduce its impact on community association board members.  The primary goal of this legislation was to combat money laundering and illegal financial activity through corporate status.  As written, the CTA requires reporting of beneficial owner information for corporate entities in the United States, and community association volunteer board members became subject to this federal law based on broad definitions under the statute. These forced reporting requirements caused a drop in volunteerism, creating unintended consequences for community associations.

The board members for a community association fall under the statutory definition of “beneficial owners”, meaning that volunteer board members were required to provide personal identifying information to the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) to be compliant.  The broad reporting rules created adverse effects on corporate entities and small businesses, including community associations.  Since the CTA’s enactment, FinCEN issued several interim rules regarding reporting requirements to alleviate the effects of the reporting requirements, including temporary delays in reporting deadlines and a temporary hold on reporting for U.S. based companies and persons.

On August 11, 2026, FinCEN issued a final rule that removes the beneficial reporting requirements for U.S companies and U.S. persons.  This rule makes all entities created in the United States, and their beneficial owners, exempt from the requirement to report beneficial owner information to FinCEN.  Any information previously submitted to FinCEN does not have to be updated moving forward and any previously submitted information will be deleted by FinCEN.

This rule is a step in the right direction regarding the CTA; however, the CTA is still federal law.  Unless and until the CTA is repealed, there is always a threat that the rules issued by the FinCEN can be changed in the future.  In January 2025, Ohio Representative Warren Davidson introduced “H.R. 425-Repealing Big Brother Overreach Act” aimed to repeal the CTA. As it stands, the bill was amended and approved in April by the House Financial Services Committee and will be sent to the House of Representatives for consideration.  

For now, community association volunteer board members are free from the reporting requirements for the foreseeable future.  The wait continues to see if Congress will pass the bill seeking to repeal the CTA in its entirety. 

If your association has questions about the CTA guidelines or requirements, please contact our office at (614) 228-0207 and speak to one of our attorneys, so we can help you through the process and protect your association.