Corporate Transparency Act Enforcement Update

The enforcement landscape surrounding the Corporate Transparency Act (CTA) has taken another sharp turn. A nationwide stay on enforcing the CTA, which was issued only 20 days ago, has now been lifted. This decision clears the way for FinCEN to enforce the rules requiring legal entities to register their beneficial owners. The big question on everyone’s mind is, "What about the January 1, 2025 deadline?" The good news is that the deadline has been extended—but not by much.

Here’s the breakdown of everything compliance professionals and financial institutions need to know about the updated timelines and enforcement steps.

Key Events Leading to the Update

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued an order granting a preliminary injunction, effectively pausing the federal government’s enforcement of the CTA. This injunction was meant to provide time to assess the constitutionality of the CTA’s registration requirement.

However, on December 23, the U.S. Court of Appeals stepped in to reverse this. The court granted a stay of the previous injunction, which allows FinCEN to proceed with enforcement. This swift reversal means reporting companies must once again prepare to file their beneficial ownership information (BOI) reports. And although the timeline has been adjusted for some, swift action is still required.

Updated Reporting Deadlines

FinCEN has announced updated reporting deadlines for various categories of entities. Here’s what has changed:

• Existing Companies:

Reporting companies created or registered before January 1, 2024, must file their initial BOI reports by January 13, 2025. Originally, the deadline was set for January 1, 2025.

• Post-September 2024 Entities:

Companies created or registered in the U.S. on or after September 4, 2024, that had a filing deadline falling between December 3, 2024, and December 23, 2024, now also have until January 13, 2025, to file.

• Entities Registered During December 3–23, 2024:

Companies created or registered from December 3, 2024, to December 23, 2024, are granted an additional 21 days from their original filing deadline.

• Disaster Relief Extensions:

Reporting companies qualifying for disaster relief may file beyond January 13, 2025, depending on their unique circumstances. These businesses should comply with whichever deadline falls later.

• Future Registrations (Post-January 1, 2025):

Entities created or registered after January 1, 2025, will have 30 days to file BOI reports once their formation or registration is effective.

Exception for Plaintiffs in National Small Business United v. Yellen:

Plaintiffs associated with this case, including Isaac Winkles and certain reporting companies under his ownership, as well as members of the National Small Business Association (as of March 1, 2024), are currently exempt from reporting their BOI to FinCEN.

What Does This Mean for Compliance Programs?

Here’s the silver lining for compliance officers and financial institutions alike—you don’t need to make drastic changes to your program just yet. For now, continue adhering to the current beneficial ownership rules while FinCEN advances its multiphased execution of the CTA.

However, the evolving situation does warrant heightened awareness and preparation. It’s evident that FinCEN intends to proceed with its enforcement strategy and that the CTA remains a priority for U.S. regulators, alongside proposed rules to strengthen AML/CFT programs.

Why This Matters and How to Stay Ahead

Navigating these updates can be tricky, especially given the dense and frequently shifting regulatory landscape. Staying compliant while maintaining your institution’s operational efficiency demands a proactive approach. That’s where preparing now becomes crucial. 

For compliance professionals and financial institutions, understanding these updates and ensuring readiness for future phases of the CTA is critical for avoiding potential penalties. 

Need Help Navigating This?

If this all feels overwhelming, don’t worry—you’re not alone! At Bankers Compliance Consulting, we’re committed to helping teams like yours stay informed and equipped to adapt to regulatory changes. That’s why our BSA/AML/CFT Membership Group is hosting a comprehensive update to break down the complexities of the Corporate Transparency Act and its evolving enforcement plans.

Here’s What You’ll Gain by Joining:

• Detailed guidance on the CTA’s changing requirements

• Insights into FinCEN’s phased enforcement approach

• Updates on additional regulations, such as the Proposed Rule to Strengthen U.S. AML and CFT programs

• Tools and training for your team to remain fully compliant

Join our membership group and access the knowledge and tools you need to ensure your compliance program is ready for what’s ahead.

Join the AML/CFT Membership Group Today

Stay informed. Stay compliant. Stay ahead.

Published
2024/12/24