The Treasury Department will no longer require homeowners associations and most other U.S. businesses to report their true owners to federal regulators, ending a years-long fight over a law that HOA advocates warned could have driven up association fees.
The Financial Crimes Enforcement Network, a Treasury bureau, issued a final rule on Aug. 11 permanently eliminating beneficial ownership reporting requirements for U.S. companies and U.S. persons under the Corporate Transparency Act. The rule took effect upon its publication in the Federal Register. FinCEN said it will delete beneficial ownership information already submitted by entities that are now exempt, though foreign entities with foreign beneficial owners must still comply with the reporting requirements.
The Corporate Transparency Act, enacted in 2021, required roughly 32 million business entities nationwide β including HOAs and companies that hold real estate through LLCs β to disclose names, addresses and other details about anyone who owns more than 25% of the entity or exercises “substantial control” over it. The government’s original justification was that anonymous shell companies enable an estimated $300 billion a year in fraud and money laundering.
The law drew dozens of lawsuits, including from homeowners who held property through LLCs and argued the entities had no profit motive and posed no money-laundering risk. HOA groups separately warned that continually reporting changes in volunteer board membership would raise compliance costs and discourage people from serving on boards. The Community Associations Institute, which represents roughly 373,000 HOA and condo associations nationwide, said the rule change is “a significant victory for community associations and the volunteer board members who serve them,” according to Realtor.com’s reporting, adding that the “permanent regulatory relief provides certainty for associations and allows volunteer board members to focus their time and resources on serving their communities.”
Treasury Secretary Scott Bessent called the change “a victory for common sense and American small businesses,” telling Realtor.com that “Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security.”
Not everyone welcomed the move. Erica Hanichak, co-director of the FACT Coalition, a group that lobbies for financial-transparency regulations, said the rollback “keeps the floodgates open for criminals to launder money through U.S. shell and front companies.” She added that “the Treasury Department has handed a major victory to U.S. adversaries, corrupt officials, fraudsters, and tax evaders who use our financial system to move and hide illicit wealth.”
What it means: The rule change itself is a verified federal action, confirmed directly on FinCEN’s own site. The competing characterizations β that it’s either overdue relief for small businesses and volunteer HOA boards, or a rollback of anti-money-laundering safeguards β are attributed positions from interested advocacy groups and the Treasury Secretary, not independently adjudicated outcomes. For real estate specifically, the practical effect is that HOAs and property-holding LLCs no longer face the compliance burden of tracking and reporting changes in board membership or ownership, a requirement that had been a persistent source of confusion since the law’s rollout.
The reversal comes as HOAs nationwide have faced other financial pressures, including a nearly 40% jump in foreclosures as associations tighten enforcement on delinquent dues. Beneficial-ownership disclosure has also been a live issue in commercial real estate ownership disputes, including a recent case in which New York’s attorney general forced a private equity firm to cede control of a Hudson Yards condo tied to ownership-transparency concerns.
