HOA boards will no longer have to provide personal information to the Financial Crimes Enforcement Network.  This week, Scott Bessent, the new Secretary of Treasury in the Trump Administration, announced the Treasury Department will not enforce the Corporate Transparency Act (CTA) against U.S citizens and domestic companies.  This ruling includes domestic homeowner association boards.   The Treasury Department announced it will now draft an emergency ruling stating only foreign companies will be subject to the Corporate Transparency Act.

According to the Department of Treasure website on March 2, 2025, “the Treasury Department this week that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.”

The Why: “This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent.  “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”

Word Basics™:

Corporate Transparency Act (CTA): An act of Congress designed as one of the tools to protect the financial system from money laundering, terrorism financing, and other illicit activity.  It is administered by the Financial Crimes Enforcement Network (FinCEN)., a bureau of the U.S. Department of the Treasury.  Congress created the Corporate Transparency Act (CTA) of 2019, which was passed in 2020 as part of the Anti-Money Laundering Act.

The Corporate Transparency Act (CTA) went into effect on January 1, 2024, and was enacted as part of the Anti-Money Laundering Act of 2020. FinCEN issued the implementing final rules on September 29, 2022. Pursuant to these rules, reporting companies[1] formed before 2024 were to file their initial beneficial ownership reports (BOIRs) with FinCEN by January 1, 2025. Reporting companies formed after January 1, 2024, and before January 1, 2025, were to file their initial BOIR within 90 days following their formation.  Source: Robinson & Cole LLP

Financial Crimes Enforcement Network (FinCEN):  Also referred to as the Financial Crimes Enforcement Network, is a US Treasury agency that fights financial crime.  FinCEN's mission is to protect the US financial system from money laundering and terrorism financing. 

What is a “reporting company” under the Corporate Transparency Act? 
A “reporting company” is defined under the CTA as “a corporation, limited liability company, or other similar entity” that is either “created by the filing of a document with a secretary of state or a similar office under the law of a State or Indian Tribe” or “formed under the law of a foreign country and registered to do business in the United States.”  Source: Robinson & Cole LLP