Falls Church, Va., April 18, 2024 (GLOBE NEWSWIRE) -- Community Associations Institute (CAI), the leading international authority on community association governance, education, and management, is calling on policymakers to exempt homeowners associations, condominiums, and housing cooperatives from the beneficial ownership interest reporting requirements outlined in the Corporate Transparency Act.
Enacted by Congress in 2021, the Corporate Transparency Act aims to enhance transparency in corporate ownership structures and combat financial crimes such as money laundering and terrorist financing. However, the unintended consequences of this law will burden over 75.5 million Americans residing in more than 365,000 community associations nationwide.
"The Corporate Transparency Act, while well intentioned, poses significant challenges and potential harm to the millions of homeowners residing in community associations across the nation. CAI recognizes the importance of transparency in corporate structures; however, the law fails to address the unique complexities and nature of community associations,” says Dawn M. Bauman, CAE, CAI’s chief strategy officer and executive director of the Foundation for Community Association Research.
CAI believes the implementation of reporting requirements under the Corporate Transparency Act would impose significant compliance burdens and liability risks on community associations. The financial strain and administrative complexities associated with compliance could hinder their ability to provide essential services, jeopardizing the well-being of residents, and discourage volunteer leaders to take on the responsibility of governing their community due to the exposure to liability posed by these overwhelming compliance requirements and penalties.
Moreover, recent events, including a federal court's ruling in March deeming the act unconstitutional and the Treasury Department’s Financial Crimes Enforcement Network selective enforcement exemptions, underscore the urgency for exemptions for community associations. There is chaos and inconsistency related to understanding of the act and to which organizations it applies.
CAI actively supports the Protect Small Business and Prevent Illicit Financial Activity Act (S.3625), the Senate counterpart to H.R. 5119. This bipartisan bill, overwhelmingly passed by the House in December, aims to postpone the Corporate Transparency Act's implementation. Senate Republicans have expressed unanimous support to the delay while Democratic leadership on the Senate Banking Committee has not scheduled the bill for a hearing.
CAI remains committed to advocating for policies that promote the effective governance and sustainability of community associations. CAI urges policymakers to recognize the distinct characteristics of community associations and grant them exemptions from the beneficial ownership reporting requirements under the Corporate Transparency Act. Such exemptions are crucial to safeguarding the vitality and effectiveness of community association governance.
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About Community Associations Institute
Since 1973, Community Associations Institute (CAI) has been the leading provider of resources and information for homeowners, volunteer board leaders, professional managers, and business professionals in the more than 365,000 homeowners associations, condominiums, and housing cooperatives in the United States and millions of communities worldwide. With more than 45,000 members, CAI works in partnership with 36 legislative action committees and 64 affiliated chapters within the U.S., Canada, South Africa, and the United Arab Emirates as well as with housing leaders in several other countries, including Australia, Spain, and the United Kingdom. A global nonprofit 501(c)(6) organization, CAI is the foremost authority in community association management, governance, education, and advocacy. Our mission is to inspire professionalism, effective leadership, and responsible citizenship — ideals reflected in community associations that are preferred places to call home. Visit us at www.caionline.org, and follow us at @CAISocial.
Blaine Tobin Community Associations Institute 703-970-9235 btobin@caionline.org
