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FinCEN Issues Guidance on Residential Real Estate Rule After Texas Court Vacates RegulationOn May 18, 2026, FinCEN published three new frequently asked questions addressing the current status of its Residential Real Estate Rule, which was invalidated by a federal court in Texas earlier this year. The guidance makes clear that title professionals and other reporting persons have no current obligation to file Real Estate Reports and will not face penalties for non-compliance while the court's order stands.
FinCEN Files Notice of Appeal in Flowers v. Bessent; Pause of Residential Real Estate Rule Remains in PlaceOn 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.
Federal Court Vacates FinCEN Anti-Money Laundering Regulations for Residential Real Estate Transfer Rule (RRE Rule)On March 19, 2026, a federal court in the Eastern District of Texas, Tyler Division, granted summary judgment in favor of a title company plaintiff, Flowers Title Companies, LLC, which challenged that the FinCEN Residential Real Estate Transfers Rule (RRE Rule) exceeded FinCEN's statutory authority under the Bank Secrecy Act.
The case was decided on cross-motions for summary judgment, meaning both parties agreed there were no disputed facts and the case turned entirely on questions of law. As part of his ruling, U.S. District Judge Jeremy Kernodle denied FinCEN's cross-motion for summary judgment, and ordered that the RRE Rule be vacated in its entirety and remanded to FinCEN. FinCEN Issues Final Rule - Effective March 1, 2026In a recent press release, the Financial Crimes Enforcement Network (FinCEN) announced that it is postponing the reporting requirements of its Anti-Money Laundering Regulations for the Residential Real Estate Transfers Rule (RRE Rule) by three months to March 1, 2026.
This Anti-Money Laundering in Real Estate Rule (Rule) is expected to affect all CLTA members that handle sale transactions involving buyer entities or trusts without involving FDIC-insured lenders. The Rule has no geographic limitations, no purchase price thresholds, limited transactional exemptions, and requires the collection and reporting of significant amounts of information. U. S. Department of Treasury (FinCEN)
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NOTE: The above presentations are meant for informational purposes only and the statements and opinions provided are not those of CLTA or its member companies. CLTA strongly recommends that underwritten title companies, independent escrow companies and real estate professionals consult directly with the title insurance companies with which they do business to discuss the title insurer’s precise expectations and protocols associated with FinCEN reporting. |
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