Latest Developments with the Corporate Transparency Act

Latest Developments with the Corporate Transparency Act

The rapidly changing requirements for filing Beneficial Owner Information (“BOI”) reports under the federal Corporate Transparency Act (“CTA”) continue. Over the past couple of months, community associations have been on a whirlwind of a ride trying to keep track of whether or when to comply with the CTA.   As of the publishing date of this article, the most recent update is as follows: on January 24, 2025, the U.S. Financial Crimes Enforcement Network (“FinCEN”) published a notice on its website (https://www.fincen.gov/boi) confirming that compliance with the CTA remains voluntary for now due to pending litigation. 

As you may recall, in the case of Texas Top Cop Shop, Inc. v. Garland, on December 23, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit issued an Order that reinstated the CTA’s reporting requirement after being initially paused on a nationwide basis by the U.S. District Court for the Eastern District of Texas. Then on December 26, 2024, the full U.S. Court of Appeals for the Fifth Circuit issued a new Order, reinstating the nationwide preliminary injunction, thus again pausing the reporting requirement. On January 23, 2025, a three-judge panel of the U.S. Supreme Court ended the nationwide injunction that had been entered in the Texas Top Cop Shop case. Despite this ruling, however, FinCEN took the position on January 24, 2025, that a preliminary nationwide injunction entered in a separate Texas federal case (Smith vs. US Department of the Treasury) continues to be in effect and that the BOI filing deadline under the CTA remains paused.

Again, as of January 28, 2025, community associations deemed to be “reporting companies” under the CTA, for now, are not obligated to file BOI reports while the nationwide preliminary injunction remains in place in the Smith case. Reporting companies, however, remain free to voluntarily file BOI reports with FinCEN. It is likely that additional court rulings will continue to impact the enforcement of the CTA, so we will continue to keep our clients informed. Updates can be found on our website in the CWMEB Journal.  We also suggest monitoring the FinCEN website for further developments as to a new deadline.

In the meantime, to best serve our clients, as well as due to FinCEN’s failure to grant community associations an exemption, our law firm has partnered with a Corporate Transparency Act reporting vendor named FincenFetch to establish a secure, ready-made solution as a service to our clients to file their Beneficial Ownership Information Reports with FinCEN. Here are the details:

• BOI Filing Requirement. As noted in our prior posts and newsletters, the CTA requires that many organizations in the United States file reports regarding their “Beneficial Owners” to the Department of Treasury’s FinCEN website. This includes most community associations.
• Deadline and BOI Requirements. As noted above, the reporting deadline has been paused, at least for now. Prior to that order, however, the deadline for filing BOI Reports (for organizations created prior to January 1, 2024, that are subject to the CTA) had been extended to January 13, 2025, pending further order of the court. While the deadline is not in effect as of this date, if the filing requirement is reinstated at some point, keep in mind that there is also an ongoing reporting requirement for updates to be filed within 30 days of any change, such as when a director joins or leaves the board or there is any other change in the reported information. For community associations, the BOI reports include information regarding the association’s beneficial owners (such as each officer and director’s name, address, date of birth, and the image of a government issued ID). It is critical that associations comply with the filing requirement if it is reinstated, as there are civil and criminal penalties for failing to do so.
• Affiliation with FincenFetch. While a law firm is not required for associations to report BOI information, some boards have indicated that they have had trouble completing and uploading these reports, and other clients have expressed a preference to be able to file the reports in coordination with their legal counsel. Therefore, CWMEB reached an arrangement with FincenFetch, an industry-leading vendor that assists organizations in collecting BOI information and uploading the reports to the FinCEN website. FincenFetch uses state-of-the-art, secure servers to store and transmit the BOI information from directors and upload it to FinCEN through an easy-to-use interface. FincenFetch also sends out periodic email reminders for associations and directors to update information (such as when officers or directors change or IDs expire) to assist with ongoing compliance.
• Opting In to Access FincenFetch Through CWMEB. If your community association would like to use Chadwick-Washington’s FincenFetch portal to file its BOI reports and comply with the CTA requirements, here are the details:
• How to Do It. Simply have an authorized association officer or manager send an email to [email protected] with the name of your association and basic contact information. After this, an email will be sent back to the requesting contact person with a unique, secure link to complete the process. The report will be completed online, with a separate secure link to be emailed to each individual director (or other identified “beneficial owners”) prompting them to upload their personal information to FincenFetch (without other directors having access to others’ personal information). Once all beneficial owners have uploaded their information, CWMEB will be notified, and the association’s BOI report can be uploaded to and filed with FinCEN.
• Technical Help If Needed. The FincenFetch portal includes a chat messaging system for technical support if directors or managers have any questions or issues uploading their information. Our team, of course, is also available to address any legal questions the association may have.
• Costs. By opting in to use CWMEB’s FincenFetch portal, your association agrees to pay a flat fee to our firm for the initial BOI report filed through our platform, and a smaller additional charge for any updated reports. More information regarding these fees can be obtained by sending an email to [email protected].
• Accuracy of Information. Please note that it is up to the association and its board members to accurately and fully report all required BOI information. CWMEB is not responsible to the association, FinCEN or any other party for incomplete, inaccurate or false information reported to FincenFetch or FinCEN. Please note that reports will not be uploaded to FinCEN until the association has certified that all beneficial owners (such as officers and directors) have reported all their required information.

• The firm is hopeful that our arrangement with FincenFetch will help your association quickly and efficiently comply with the requirements of the CTA in a secure and easy-to-use portal. Please contact your association attorney if you have any questions or concerns regarding complying with CTA or opting in to our FincenFetch program.

Of course, associations should continue to monitor ongoing developments regarding the various court cases involving CTA, with particular attention to determining whether reporting deadlines have been reinstated. We will work to provide updated information on our website in the CWMEB Journal, but associations may also monitor other sources of information and media outlets, including updates from the Community Associations Institute.