FinCEN Files Notice of Appeal in Flowers v. Bessent; Pause of Residential Real Estate Rule Remains in Place

On May 11, 2026, the Financial Crimes Enforcement Network (FinCEN), along with the U.S. Department of the Treasury and Treasury Secretary Scott Bessent, filed a Notice of Appeal in Flowers Title Companies, LLC v. Bessent. The filing, which was made in the U.S. District Court for the Eastern District of Texas and sends the matter to the U.S. Court of Appeals for the Fifth Circuit, indicates that the Treasury Department is appealing both the district court's March 19, 2026 Memorandum Opinion and Order granting summary judgment to the plaintiff, and the Final Judgment entered the same day.

On March 19, 2026, U.S. District Judge Jeremy D. Kernodle granted summary judgment in favor of Flowers Title Companies, holding that FinCEN exceeded its statutory authority under the Bank Secrecy Act, and vacated the Rule in its entirety under the Administrative Procedure Act. Shortly afterward, FinCEN publicly stated that, in light of the court's decision, reporting persons are not currently required to file Real Estate Reports and are not subject to liability for failing to do so while the order remains in force.
 
A Notice of Appeal is a procedural filing that preserves the government's right to ask a higher court to review and potentially reverse the district court's decision. Filing a Notice of Appeal, on its own, does not reinstate the Residential Real Estate Rule or lift the district court's order of vacatur. The Notice of Appeal does not include a motion to stay the district court's order, and no stay has been entered.
 
As of this writing, FinCEN has not communicated anything to indicate that its pause of the Residential Real Estate Rule has been lifted. The agency's guidance, that reporting persons are not currently required to file Real Estate Reports and face no liability for not doing so while the vacatur remains in force, currently remains the public position from FinCEN.
 
CLTA will continue to monitor the appeal and any further guidance from FinCEN, and will keep members informed as developments occur.

​Bulletin 25/26-82