U.S Magistrate Judge Recommends No Injunction on FinCEN Rules

A federal magistrate judge had recommended to a U.S. District Court that it rule in favor of FinCEN in a case filed by Fidelity last year seeking an injunction against FinCEN’s “Anti-Money Laundering Regulations for Residential Real Estate Transfers.” Those regulations are scheduled go into effect on March 1, 2026. 

After a hearing on competing motions for summary judgment, the magistrate judge who considered the arguments filed a recommendation with the District Court favoring summary judgment for FinCEN.  Fidelity filed a response on Dec. 30, objecting to the recommendation. Among other things, Fidelity’s response argues that the magistrate’s recommendation did not apply the correct legal standard regarding FinCEN’s statutory authority and misconstrued the validity and appropriateness of various terms used in the regulations. 
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The key issue in the request for an injunction focused on whether the rule exceeded FinCEN’s legal authority, was arbitrary and capricious, and violated the Fourth and First Amendments. FinCEN argues that the rule is balanced considering the goal of addressing the risk of money laundering.