A federal court has vacated the Financial Crimes Enforcement Network’s new anti-money laundering reporting requirements for residential real estate transfers. As a result, reporting requirements are suspended while the agency appeals the decision.
The RRE rule requires certain professionals involved in real estate closings and settlements to submit reports to FinCEN regarding certain non-financed transfers of residential real estate to legal entities or trusts. The requirements took effect in March, but the Texas-based Flowers Title Companies challenged the rule in U.S. District Court in Eastern Texas. In a decision earlier this month, the court found that the rule exceeded FinCEN’s authority under the Bank Secrecy Act.
FinCEN and the Department of Justice have appealed the ruling, according to an alert on FinCEN’s website. While the court order remains in effect, covered parties are not required to file real estate reports with FinCEN and are not subject to liability if they fail to do so.
