Corporate Transparency Act Repeal Effort: What Community Associations Should Know
- Jun 26
- 2 min read
HOA Legal Administrative Assistant Isabella Ergh
The future of the Corporate Transparency Act (“CTA”) remains ambiguous as Congress considers legislation to repeal this law that created Beneficial Ownership Information (“BOI”) reporting requirements for certain corporations and LLCs.
The proposed repeal legislation, H.R. 425, “Repealing Big Brother Overreach Act,” would eliminate the CTA and FinCEN’s beneficial ownership reporting framework entirely.
As many community associations know, the CTA originally required certain corporations, LLCs, and similar entities to submit information regarding individuals who exercise substantial control over the entity or own at least 25% of it. Although many home and condominium owners' associations questioned whether they were intended targets of the law, numerous associations potentially fell within the reporting requirements because they are organized as nonprofit corporations that do not always qualify for an exemption.
However, in March 2025, the U.S. Department of the Treasury and FinCEN issued an interim final rule exempting domestic entities, including most U.S.-based community associations, from BOI reporting requirements. As a result, most community associations are currently not required to file BOI reports.
The proposed repeal bill would make that relief permanent by repealing the CTA altogether. Supporters of the legislation argue that the law imposed unnecessary compliance burdens on small businesses and nonprofit organizations, including volunteer-led community associations. Opponents, however, contend that repealing the CTA could weaken federal efforts to combat money laundering, fraud, and other financial crimes.
At this time, H.R. 425 has not yet become law, and the status of the CTA contin
ues to evolve through ongoing legislative action, regulatory changes, and court challenges.
Our firm will continue monitoring developments and provide updates as additional guidance becomes available. Associations with questions about compliance obligations can contact us regarding their specific circumstances.
The full text of H.R. 425 is available through Congress.gov.
It's fascinating to consider how the prospective repeal of the Corporate Transparency Act may affect community associations! As someone who has worked with a variety of neighborhood groups, I understand the value of transparency in building trust and involvement. If this legislation is reversed, we risk losing critical accountability mechanisms that protect our scratch games communities.