The Corporate Transparency Act

By Jennifer Olson, CAM / Published February 2024

The Corporate Transparency Act (CTA) was enacted by Congress in 2021 as part of the National Defense Authorization Act for Fiscal Year 2021. The main purpose of the National Defense Authorization Act for Fiscal Year 2021 is to strip U.S. shell companies of anonymity that can shield illicit financial activity as well as finance terrorist activities. The purpose of the CTA is to enhance transparency in entity structures and ownership to combat money laundering, tax fraud, and other illicit activities.

     To be in compliance with the CTA, reporting companies (such as banks) are required to obtain the following information for the beneficial owners or responsible individuals of their clients:

• Legal Name
• Residence or Business Address
• Date of Birth
• Identification Number (from a driver’s license, passport, etc.)

     How does this affect community associations? For the most part, it shouldn’t. Most financial institutions have been obtaining this information since 2016. For community associations, there is not a beneficial owner; however, an individual does need to complete the same information as a responsible individual for the business (in this case, the association). This person is an executive officer or senior manager (CEO, CFO, COO, managing member, president, vice president, treasurer, etc.) or any other individual who regularly performs similar functions and is an authorized signer on the account. This reporting typically occurs whenever there is a change of signers on the accounts at your financial institutions or when a new account is being opened.

Jennifer Olson

Vice President of Association Banking Group, Centennial Bank

     Jennifer Olson is a vice president of association banking group for Centennial Bank. Jennifer has also held her FL community association manager’s license since 2014 and is a member of CAI’s National Business Partners Council. Centennial Bank’s association banking group provides specialized banking for community associations. All funds remain in the local community with local management and local decision-making.  For more information, call 561-236-3378 or email jolson@my100bank.com. You can also visit www.my100bank.com/association-banking.