This memorandum provides an update regarding the Financial Crimes Enforcement Network’s (“FinCEN”) Anti-Money Laundering Regulations for Residential Real Estate Transfers (the “Rule”).
On March 19, 2026, the U.S. District Court for the Eastern District of Texas, in Flowers Title Companies, LLC v. Bessent, vacated the Rule in its entirety. The Court held that FinCEN exceeded its statutory authority under the Bank Secrecy Act and set the Rule aside effective immediately.
The Rule would have required “reporting persons,” including title agencies, settlement agents, closing professionals, and attorneys, to file reports with FinCEN for certain non-financed transfers of residential real property to legal entities or trusts. Its implementation had been scheduled for March 1, 2026. As a result of the Court’s decision, the Rule is not currently enforceable, and “reporting persons” have no present obligation to make the FinCEN filings contemplated by the Rule.
However, in light of the likelihood of an appeal and the existence of a conflicting federal court decision (including a Florida federal court decision upholding the Rule in Fidelity National Financial, Inc. v. Bessent ), McLane Middleton continues to collect information for transactions that could be reportable under the Rule and retain such information in its files pending further legal developments.
McLane Middleton is actively monitoring this matter and will provide updates as significant developments occur, including any appeal, stay, or additional regulatory guidance.
This notice is intended as a general summary of recent developments and does not constitute legal advice. The application of these issues may vary depending on the specific facts of a transaction. Please contact us if you have questions regarding a particular closing, transfer, or compliance matter.