Community Associations Institute Files Amicus Brief Urging Review of Corporate Transparency Act
23 Mayo 2024 - 11:08AM
Community Associations Institute (CAI), the leading international
authority on community association governance, education, and
management, has filed an amicus brief addressing the
constitutionality of the Corporate Transparency Act in the United
States Court of Appeals for the 11th Circuit.
The case, National Small Business United d/b/a the National
Small Business Association, et al., v. Janet Yellen, Secretary of
the Treasury, et al., centers on a challenge to the act’s
constitutional validity.
In March, a U.S. District Court in Alabama ruled portions of the
act unconstitutional, and CAI fully encourages the 11th Circuit to
uphold this decision.
Enacted by Congress in 2021, the Corporate Transparency Act
requires certain business entities to register with the Treasury
Department’s Financial Crimes Enforcement Network. The act is
intended to bolster transparency and counter money laundering
and terrorist financing efforts. CAI supports the act’s intent but
believes its broad application presents undue burdens on local,
volunteer-driven, nonprofit organizations such as community
associations, which play pivotal roles in maintaining neighborhoods
and serving residents.
"CAI recognizes the importance of transparency in corporate
ownership structures under the Corporate Transparency Act. However,
CAI believes that community associations unintentionally fall under
its scope,” says Dawn M. Bauman, CAE, CAI’s chief strategy officer
and executive director of the Foundation for Community Association
Research.
“The act's broad application will burden community associations
with excessive reporting requirements, hindering their ability to
serve residents effectively,” she adds. “We advocate for a balanced
approach, urging policymakers to consider an exemption for
community associations to ensure essential governance functions
remain unimpeded.”
The amicus brief filed by CAI underscores the adverse effects
the Corporate Transparency Act would have on community associations
and asserts that its expansive reach exceeds congressional
authority. Volunteers play a critical role in fostering vibrant
neighborhoods, and CAI warns that compliance with the act's
reporting mandates could have a chilling effect on the elected
leaders who serve their communities.
Contributing their expertise to the amicus brief are attorneys
and fellows of CAI’s College of Community Association Lawyers:
Edmund Allcock, a CCAL fellow with Allcock Marcus, in Braintree,
Mass.; Norman Orban, an attorney with Allcock Marcus; Julie Howard,
a CCAL fellow with NowackHoward in Atlanta; Brendan Bunn, a CCAL
fellow with Chadwick, Washington, Moriarty, Elmore & Bunn in
Fairfax, Va.; Thomas Ware, a CCAL fellow with Kulik Gottesman
Siegel & Ware in Sherman Oaks, Calif.; Todd Sinkins, a CCAL
fellow with Rees Broome in Tysons Corner, Va.; and Steven Casey, an
attorney with Jones Walker in Birmingham, Ala.
CAI supports the lower court’s decision declaring the Corporate
Transparency Act unconstitutional and urges the 11th Circuit Court
of Appeals to affirm that decision.
Blaine Tobin
Community Associations Institute
703-970-9222
btobin@caionline.org