FinCEN Ends BOI Reporting for Board Members | CPM

On Aug. 11, the U.S. Treasury Department’s Financial Crimes Enforcement Network issued a final rule removing requirements for U.S. companies and U.S. persons, including community association board members, to report beneficial ownership information to FinCEN under the Corporate Transparency Act. The final rule will be effective pending publication in the Federal Register.

Key Takeaways:

• This update removes a major compliance concern that had placed volunteer community association board members in the same reporting framework as business owners.
• The final rule reflects the privacy concerns CAI raised about requiring board members to submit personal information to FinCEN.
• Boards should understand that this is a regulatory change, not the end of the Corporate Transparency Act itself.
  
  

Last year, FinCEN issued an interim final rule removing the requirement for U.S. companies and U.S. persons to report beneficial ownership information to FinCEN under the CTA. Through this interim final rule, all entities created in the United States, including those previously known as domestic reporting companies and their beneficial owners will be exempt from the requirement to report BOI to FinCEN. This interim ruling served as a temporary, binding set of rules until this more comprehensive final rule was issued and published.

CAI has advocated for community association board members to be exempt from the CTA’s reporting requirements since the law’s implementation raised significant compliance and privacy concerns for associations and their volunteer leaders.

As part of its multi-year effort, CAI engaged with federal policymakers and FinCEN, submitted regulatory comments, mobilized advocates, and educated community association leaders and professionals about the evolving requirements. In September 2024, CAI also filed a federal lawsuit against the U.S. Treasury Department challenging the application of the CTA to community associations seeking relief.

Community associations are typically governed by volunteer homeowners elected to serve on their boards. CAI maintained these volunteer leaders were unintentionally caught within a law intended to combat money laundering and other illicit financial activity and should not be subject to requirements designed to identify the beneficial owners of companies.

What Does the Final Rule Say?

• U.S. companies and U.S. persons, including community association board members, are permanently exempt from beneficial ownership information reporting requirements.
• U.S. persons who obtained FinCEN identifiers are not required to update or correct information previously provided to FinCEN.
• FinCEN will implement a process to delete previously reported information that it reasonably believes was provided by U.S. persons, including information previously submitted by community association board members.
• Certain foreign entities registered to do business in the United States remain subject to reporting requirements for foreign individuals.
  
  

Does the Final Rule Repeal the Corporate Transparency Act?

These changes are regulatory interpretations and exemptions under the CTA, not a repeal of the federal act. The CTA remains on the books, and the final rule is a binding Treasury regulation that alters how the law is applied in practice. The statute remains in federal law unless Congress explicitly repeals it. The Treasury Department cannot repeal the statute by itself. If Congress wants to remove the CTA entirely, it needs to pass and enact legislation to repeal it.

What Happens Next With H.R. 425?

In January 2025, Ohio Rep. Warren Davidson introduced H.R. 425 – Repealing Big Brother Overreach Act. If passed, it would fully repeal the CTA. This bill currently has 191 cosponsors in the House and was amended and approved in April by the House Financial Services Committee. If passed, the bill will fully repeal the CTA and require FinCEN to delete data from BOI filings for Americans and entities that are not reporting companies within 90 days of the bill’s adoption.

This bill will now be sent to the House floor for consideration. Though this final regulatory rule has been issued, CAI needs you to continue to contact your representative to urge them to support H.R. 425 and remove the CTA from federal law.

Please join CAI in supporting this piece of legislation by participating in CAI’s call to action here.

For more information on CAI’s multi-year initiative to exempt community association board members from these reporting requirements, please visit their webpage here.

Learn more with Campbell

Campbell Property Management will continue sharing important legal, regulatory, and compliance updates affecting Florida condominium and HOA communities. Board members and managers should continue monitoring developments related to the Corporate Transparency Act and consult legal counsel with association-specific questions. You can also visit CampbellEvents.org to explore relevant, upcoming webinars and educational opportunities for board members, property managers, and community association professionals.

Phoebe E. Neseth, Esq. serves as CAI’s Vice President of Government Relations, Public Affairs & Legal at CAI and is a licensed attorney specializing in government relations, public affairs, and legal advocacy for the community association housing model. In this role, Phoebe leads CAI’s advocacy efforts at the local, state, and federal levels, directing strategic public policy initiatives, leading legislative action committees, and overseeing legal programs and initiatives through CAI’s College of Community Association Lawyers (CCAL).