I am writing to inform you that CAI has filed a lawsuit against the U.S. Department of the Treasury, Secretary Janet Yellen, and the director of the Financial Crimes Enforcement Network. This action is being taken to protect our members from the burdensome and unnecessary requirements of the Corporate Transparency Act.
The act imposes new reporting requirements on many entities, including community associations. Under the law, volunteer board members of condominiums, homeowners associations, and housing cooperatives will be required to provide sensitive personal information to the federal government. These requirements were designed to combat illegal activities including terrorism financing and money laundering. The Treasury Department has taken a very broad approach to implementing this law, impacting organizations like community associations that are extremely unlikely to be engaged in such activities. We believe the application of the Corporate Transparency Act to community associations is an overreach and potentially unconstitutional.
CAI has worked with the Treasury Department for over a year to pursue a regulatory exemption for community associations but has been unsuccessful. Since the law’s implementation date for existing associations is rapidly approaching on Jan. 1, we determined that a lawsuit was necessary to protect community association rights and ensure they are exempt from the act.
Along with the full complaint (lawsuit), CAI is filing a motion for preliminary injunction. A preliminary injunction is temporary relief that maintains the status quo until the court decides the merits of the case.
In the lawsuit, we seek to: