We reported back in the Spring that the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a Notice of Proposed Rulemaking to combat and deter money laundering in the U.S. residential real estate sector by increasing transparency.
Now, according to American Land Title Association (ALTA), the U.S. Treasury Department’s FinCEN issued a final rule requiring certain people involved in real estate closings and settlements to report information to the agency about all-cash residential transactions nationwide involving legal entities and trusts. The effective date will be December, 1, 2025 and a fact sheet can be found by clicking here.
ALTA says the proposed rule expands on the GTOs (Geographic Targeting Orders), which require title insurance companies to file reports identifying the beneficial owners of LLCs in all-cash real-estate transactions above certain monetary thresholds in select areas in the country. However:
- Unlike the GTOs, reporting under the proposal is not limited geographically
- There is no dollar threshold.
- Under the rule, the person conducting the settlement will have to file a limited purpose suspicious activity report within 30 days of settlement.
- FinCEN indicated it will develop a specific real estate report form for electronic filing. This will hopefully address many of the issues the industry experienced with the GTO reporting.
In addition, the new rule says the “reporting person” is the person conducting the settlement/closing or the person who prepares the settlement statement. Reporting can’t be avoided if the buyer chooses not to purchase title insurance.
Click here to read the full release at ALTA.
Click here to read the FinCen fact sheet.
Click here to read the new rule.
