With the Treasury Department’s Financial Crimes Enforcement Network’s (FinCEN) major real estate transaction reporting rule on pause, a leading trade association is taking the opportunity to push for reform.
The Anti-Money Laundering Regulations for Residential Real Estate Transfers, also known as the Residential Real Estate Reporting Final Rule, had been legally challenged from multiple directions since its announcement in 2025. One of those court cases, brought on by Flowers Title Companies in Texas, led to a court ruling vacating the rule and pausing enforcement as of March 19.
During this pause, the American Land Title Association (ALTA) is urging FinCEN to make some simple changes to the rule’s parameters that would, in ALTA’s opinion, significantly reduce the burden on title agencies while still providing law enforcement with the data that underlies this effort.
In a letter from ALTA addressed to FinCEN Director Andrea Gacki and dated April 9, ALTA expresses a willingness to collaborate with the regulatory body on any new guidance for reporting that does not impose further burdens on those required to report – especially if FinCEN decides to appeal the recent vacatur ruling.
The Department of Justice has until May 18 to file such an appeal on FinCEN’s behalf.
Following the U.S. District Court for the Eastern District of Texas, Tyler Division, . order and FinCEN’s subsequent guidance indicating that reporting is not required for the time being, settlement services companies have halted the collection of data necessary to comply with the rule. In the letter, ALTA argued that resuming this data collection would be challenging and that the industry needs adequate lead time for reporting. To that end, ALTA asks that, if FinCEN appeals the vacatur order, they also provide at least 90 days of lead time for compliance.
Additionally, if reporting resumes, ALTA asked FinCEN to clarify that the reportable date for transactions is based on when the purchase and sale contract is signed, not the closing date, which can vary during the transaction process. To support this request, ALTA conducted a survey with more than 850 title companies regarding their experiences with compliance since enforcement of the rule began on March 1. The results indicate several ways the rule can be revised to reduce burdens while still fighting money laundering in real estate.
More than half of the respondents reported that FinCEN's reporting requirements caused delays in real estate closings, with 16 percent experiencing frequent delays and 39 percent reporting occasional delays. These delays negatively affected buyers and sellers, impacting rate locks, lease expirations and coordinated move dates.
Respondents added that many clients expressed concerns over privacy and data security, with 84 percent voicing such worries and 55 percent citing delays as a concern. Nearly half indicated that clients refused to provide necessary information for reporting, with some buyers restructuring transactions to avoid triggering reporting requirements.
ALTA argued that the operational burden inherent to the rule is evident at every stage of the process, with respondents to the survey highlighting difficulties in collecting required data from customers (65 percent), educating buyers and sellers (52 percent), identifying beneficial owners (50 percent) and training staff (45 percent).
More than half of the respondents also indicated that they have dedicated staff for FinCEN reporting, and 42 percent have outsourced this task. Additionally, more than 63 percent reported that employees are concerned about potential criminal and civil liability due to the rule, placing significant pressure on small businesses and homebuyers.
ALTA concluded its letter by requesting that FinCEN narrow the rule to ease its burden on small title companies while retaining its essential purpose. Suggested changes include:
- Setting a nominal dollar threshold to exclude low-value transfers
- Exempting transfers to entities controlled by sellers
- Exempting transfers from foreclosure proceedings
- Limiting the collection of payment information to what is realistically obtainable
- Eliminating the collection of seller and transferor information, as this adds unnecessary workload without clear law enforcement benefits