When the US Government Accountability Office published its report “Aviation: FAA Needs to Better Prevent, Detect, and Respond to Fraud and Abuse Risks in Aircraft Registration,” in March 2020, it exposed multiple risks of fraud and abuse in the aircraft registration process. As part of its assessment, the GAO outlined 15 recommendations for the FAA to address the issues which the agency agreed to implement.
While not a specific recommendation in the GAO’s report, the Civil Aviation Registry Electronic Services (CARES) platform launched in December 2022 to address most of them and has become Ground Zero for process changes to mitigate the GAO’s concerns.
As the FAA undertakes this Herculean effort to modernize and bridge gaps between digital and analog systems, some changes have left lenders and owners with concerns. While the process has been challenging—digital transformation is never easy, the ends should eventually justify the means, bolstering security, privacy and efficiency, as the FAA aims for full CARES implementation by the end of 2025.
Here's a brief review of how things have progressed, where we stand, and what to expect in the future.
The 2020 GAO Report Identified Multiple Risks
The initial GAO report called out several risks in the aircraft registration process that could enable illegal activities and nefarious aircraft use. Chief among them:
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Vulnerabilities in the registration process due to FAA reliance on self-certification of eligibility and failure to fully verify registrant identity.
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Opaque ownership structures that allow registrants to conceal beneficial ownership of the aircraft through shell companies and trusts.
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Lack of proactive enforcement of foreign sanctions that could allow forbidden foreign entities or individuals to own and operate aircraft.
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Antiquated (paper-based) data management that limits the ability to search and analyze registration data by law enforcement.
The GAO made 15 recommendations, which the FAA agreed to implement. This included registrant identity verification, introducing data analytics to identify patterns indicative of fraud and abuse, mitigation strategies to reduce fraudulent registration, and better coordination with law enforcement to root out fraudulent or illegal registrations.
While not explicitly recommended, these measures essentially necessitated the digitization of registry systems by default; hence, the CARES platform was born. Aside from enabling better data-based risk mitigation, CARES is intended to streamline the registration process, eventually replacing the manual, physical stamping process at the Public Documents Room (PDR) in Oklahoma City with a modern digital system that reduces processing times and creates a central, searchable repository for aircraft registration records. Even as the agency deals with concerns around accessibility to public records for efficiently closing transactions, progress on CARES has been a move in the right direction toward improving efficiency and reducing friction.
2024 Update Kicked Off New Activity
In April 2024, the GAO issued an updated assessment that found the FAA had made little progress on its recommendations. With the agency having completed only three of the original 15 recommendations—a fraud and abuse risk assessment, an impact and risk tolerance analysis, and development of an antifraud strategy—the GAO made it clear there is much more work left to be done.
The FAA is now picking up the pace of CARES implementation, fraud detection and mitigation, with a series of new updates in the past 9 months. Late last year, the agency eliminated electronic access to Work in Progress (WIP) documents as part of efforts to safeguard applicants’ personally identifiable information (PII). This, of course, delays access to recently filed documents, which introduces uncertainty into transactions and the potential for delays in the closing process.
Then, in January 2025, the FAA updated two transformative regulatory changes designed to modernize the aircraft registration and certification process. As of this writing, these are still being implemented, and include:
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Acceptance of electronic submissions: The FAA has determined that original documents are no longer required to be filed in many instances but will still continue to accept them.
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Sunsetting the manual document stamping process: When fully implemented, electronic submissions will be uploaded directly into the FAA system and will be automatically file stamped with submission date/time, ending the manual stamping process for digital submissions. Documents filed by mail, email or in person in the PDR will continue to be stamped.
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Flexibility for true copies: The FAA now has the flexibility to accept true or certified copies of documents in lieu of originals, ending the requirement that the actual original document be submitted and then returned to the applicant.
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Issuance of electronic registration certificates: The FAA will now issue aircraft registration and dealer certificates via email, providing near-instant delivery and eliminating the issuance of “hard cards” unless specifically requested. With hard cards no longer issued, it remains unclear whether digital registrations will be recognized by foreign jurisdictions—something registrants who fly internationally will need to keep in mind.
Potential Transaction Implications
Even as the FAA accelerates CARES implementation and takes steps to address the GAO’s recommendations, the industry is left with a number of challenges and outstanding questions.
Modernizing the registry can certainly allow better integration with screening tools and automated vetting through other governmental systems, but in doing so, the FAA must address issues with PII and data privacy rules. The protection of data and the restriction of WIP document availability might mean lenders—and the entire industry—may need to be prepared to pivot at closing time should notices of filed documents appear in the final hour.
More to come
Although the FAA still has work ahead to implement the remaining GAO recommendations, we can look forward to continued progress as the agency works toward full CARES implementation by late 2025. While change can be challenging at times, modernization brings exciting opportunities. The industry is well-equipped to adapt, and in the end, these efforts should strengthen the system, promoting greater security and efficiency.
This article was originally published by NAFA on March 11, 2025.