On Sept. 30, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that it will postpone reporting requirements of the Anti-Money Laundering Regulations for Residential Real Estate Transfers Rule (RRE Rule) until March 1, 2026, giving the industry a little more breathing room as they get ready to comply with the new requirements.
In the same announcement, FinCEN finally released the reporting form itself, which the industry had been insisting was desperately needed for agents to begin training staff on the reporting requirements.
“The failure to release this form was another reason ALTA requested FinCEN delay implementation of the rule,” said ALTA CEO Chris Morton in a release to the industry. “We informed FinCEN that without the final form, title companies would be unable to train their staff appropriately or integrate necessary documents into their systems prior to the implementation date. Given that many real estate transactions have 60-day closing periods, the Dec. 1 implementation date meant the industry would need to start screening transactions and collecting data tomorrow, Oct. 1, to properly comply.”
Given the unfortunate time crunch FinCEN created for agents, the delay is doubly welcomed by managers who will now have considerably more time to familiarize staff with the new form.
But as they say, it ain’t over till it’s over, and the industry continues to push FinCEN to abandon the requirement entirely.
I’ll See You in Court
While the industry is celebrating the delay, they remain steadfast that the regulation itself is an overreach by the agency.
Fidelity National Financial has filed a lawsuit against FinCEN’s residential real estate rule, filing both a request for summary judgment and for a preliminary injunction to stay the effective date of the rule, pending resolution of the motion for summary judgment.
The American Land Title Association (ALTA) filed an amicus brief in support of FNF's lawsuit.
While FinCEN’s delay was not a direct answer to the request for a preliminary injunction, it has the same effect, giving the courts more time to rule on FNF’s arguments.
FNF’s lawsuit puts forth several claims, all of which the court will consider, and of which even one – if granted summary judgment – could put an end to the rule. The claims include lack of statutory authority, constitutional violations under the First and Fourth Amendments, violations of the Commerce Clause and failure to conduct a cost-benefit analysis which would have shown the rule to be overly burdensome, arbitrary and capricious.
As the industry waits for the courts to rule on the claims put forth, agents are encouraged to keep an eye on developments, while still keeping their hand on the wheel, moving forward with implementation and training efforts in case the rule launches as planned in March.
At FAN, we maintain the highest standards in providing title, escrow and closing services throughout Florida, and in addition, we are dedicated to protecting the integrity of the real estate transactions we manage. Contact us today to learn how we can help you with your next transaction.
