April 02, 2026

Despite a prior ruling upholding FinCEN’s Real Estate Reporting Rule, a federal district court in Texas has vacated FinCEN's Real Estate Reporting Rule in its entirety (Flowers Title Companies, LLC v. Bessent).

The Real Estate Reporting Rule took effect on March 1, 2026, and requires persons involved in certain residential real estate closings and settlements to report information to FinCEN in specified “non-financed” transactions. These reportable transactions generally include all property transfers which do not involve traditional fincancing from instituions subject to FinCEN’s anti-money laundering and Suspicious Activity Report requirements. The rule applies to the purchaser or recipient of an interest in real property. Under the rule, reporting parties are required to submit electronic filings to FinCEN that include information about the property, the transferor, the reporting person, and the transferee (including the beneficial owners of any tranferee entity or trust).

The court concluded that FinCEN exceeded its statutory authority under the Bank Secrecy Act in issuing the rule. Although FinCEN has authority to require reporting of suspicious transactions, the court found that non-financed residential real estate transactions involving entities and trusts are not inherently suspicious. The court also determined that the Bank Secrecy Act authorizes FinCEN to require procedures that include reporting, but does not authorize the type of reporting obligations imposed by the rule. On that basis, the court ordered that the Real Estate Reporting Rule be vacated and set aside in full, including all reporting requirements.

Following the decision, FinCEN issued guidance on its website confirming that compliance witht he rule is not currently required (https://www.fincen.gov/rre):

"In 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."

The decision is likely to be appealed, particularly in light of conflicting rulings on the issue. If an appeal is filed, the court’s order could be stayed, which would result in the rule becoming enforceable again while the appeal is pending.

In the meantime, although reporting is not currently required, reporting persons may wish to continue collecting the information necessary to complete filings in the event the rule is reinstated.

Gilpin Givhan will continue to monitor developments and provide updates as additional guidance or appellate decisions emerge.