As part of the federal government’s efforts to protect the financial system and enhance national security, the Financial Crimes Enforcement Network (“FinCEN”) was created by Congress and is part of the Treasury Department. Their mission is “. . . to safeguard the system from illicit use, combat money laundering and its related crimes including terrorism, and promote national security through the strategic use of financial authorities and collection, analysis, and dissemination of financial intelligence.”
FinCEN’s Residential Real Estate Anti-Money Laundering (“AML”) Rule requires reporting of non‑financed residential real estate transfers involving legal entities or trusts, with the goal of addressing money laundering risks associated with all‑cash purchases. The rule took effect on December 1, 2025, with reporting obligations beginning March 1, 2026.
On March 19, 2026, the U.S. District Court for the Eastern District of Texas issued a decision in Flowers Title Companies, LLC v. Bessent which vacated the FinCEN AML Real Estate Reporting Rule. The Court held that FinCEN lacked the statutory authority under the Bank Secrecy Act to impose the Residential Real Estate Rule.
The following day, FinCEN issued this statement: “In light of a federal court decision, reporting persons are not currently required to file real estate reports with FinCEN and are not subject to liability if they fail to do so while the order remains in force.”
It is expected that FinCEN will appeal the ruling and seek to have the order vacating the rule stayed pending the outcome of the appeal. Timing around this remains impossible to predict. It remains unclear how long it may take to get additional clarity on the future of the rule. It is possible that transactions which are open today or may open in the future may be reportable by the time that they close.
Many title underwriters have instructed their agents that collecting information pursuant to the rule, currently, is preferred but optional. If the rule is reinstated in short order, the collection of information now could prevent delays and interruptions in closings and business.
Title underwriters further recommend that its agents and partners seek their own legal advice as they consider how best to manage the current situation.
NVAR will continue monitoring developments closely and will update members as the legal process unfolds.
