This blog is part of an ongoing series on the Corporate Transparency Act, as reporting requirements are subject to ongoing litigation. NCBA CLUSA will publish updates as additional information becomes available.
On December 26, 2024, the U.S. District Court – Eastern District of Texas reinstated a preliminary injunction that temporarily halts enforcement of the Corporate Transparency Act (CTA). As a result, cooperatives subject to CTA are no longer required to report beneficial ownership information (BOI) to FinCEN.
Over the past year, cooperative businesses have been subject to the Corporate Transparency Act, requiring them to report beneficial ownership information (BOI), including identifying details of board directors, senior officers or general managers to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) in an effort to combat money laundering, tax fraud and other illicit activities within U.S. businesses. In that time, multiple lawsuits were brought forward, challenging the constitutionality of the CTA and the ability of FinCEN to enforce its requirements. The ongoing litigation and latest court ruling are part of larger efforts, including Congressional action, to repeal or suspend enforcement of the Corporate Transparency Act for cooperatives and other entities.
The court’s order temporarily pauses enforcement of the CTA nationwide, but enforcement could resume if the court’s order is overturned on appeal. As of December 31, 2024, the Department of Justice, on behalf of Treasury, has appealed and is seeking to resume the enforcement of the CTA through a stay of the preliminary injunction.
Is my cooperative subject to the Corporate Transparency Act?
Cooperatives that do not meet the following exemptions are subject to the CTA:
- Employ more than 20 full-time employees;
- Generate more than $5 million in revenue or sales; and
- Have an operating presence at a physical office within the U.S.
Other exempt companies and their subsidiaries include all 501(c) nonprofits, public utilities, banks and credit unions. See the full list of exemptions.
NCBA CLUSA will continue to monitor ongoing CTA litigation and keep members informed of any changes to reporting requirements. To learn more about the CTA’s impact on cooperatives, you may view NCBA CLUSA updates here and receive email updates from Treasury’s FinCEN here.