Just last month, we authored an alert summarizing the Financial Crimes Enforcement Network’s (“FinCEN”) Residential Real Estate Reporting Rule (the “Rule”), which took effect on March 1, 2026. However, on March 19, 2026, the U.S. District Court for the Eastern District of Texas issued an opinion and order in Flowers Title Companies, LLC v. Bessent (Case No. 6:25-cv-127-JDK) striking down the Rule, holding that FinCEN exceeded its authority under two sections of the Bank Secrecy Act in authorizing the Rule. Based on the Court’s decision, the Rule is vacated nationwide, and real estate professionals do not need to comply with the Rule’s reporting requirements at this time. On its website, FinCEN has confirmed that “[i]n light of a federal court decision, reporting persons are not currently required to file real estate reports with FinCEN and are not subject to liability if they fail to do so while the order remains in force.”
While the Court’s decision immediately removes the Rule’s reporting requirements, FinCEN is likely to appeal, which could result in a reversal. In the meantime, real estate attorneys, title companies, and settlement agents, while not required to file Real Estate Reports under the Rule, should consider maintaining internal compliance measures given the federal government’s continued focus on anti-money laundering measures in the real estate sector. Parties to transactions involving entity purchasers should also remain mindful that similar transparency initiatives could re-emerge in revised form or through alternative regulatory channels.
The Real Estate Practice Group at Bressler Amery & Ross will keep you apprised of evolving reporting obligations and stands ready to assist you with all your real estate needs.