Back in February 2024 FinCEN released proposed rule RIN 1506-AB54  addressing Anti-Money Laundering Regulations for Residential Real Estate Transfers and FLTA responded with its own letter of recommendations in April.

After reviewing more than 600 comments, letters and submissions, FinCEN has released their final rule on the matter. Here are somethings they took at the suggestion of the Land Title Associations. FinCEN's press release is also below.

Link to FinCEN Final Rule

Link to FinCEN Fact Sheet

This list is not conclusive, nor exhaustive, only preliminary review. Be sure to review the final rule in the link above.

Things from the LTA's they appear to have incorporated:

• More than 1-year effective date (Effective December 1, 2025);
• Expanded reasonable reliance standard. “As a result, the reporting person generally may rely on information provided by any other person for purposes of reporting information or to make a determination necessary to comply with the final rule, but only if the reporting person does not have knowledge of facts that would reasonably call into question the reliability of the information.”;
• New exemptions for transfers to a trust for estate planning and to a qualified intermediary for 1031 purposes;
• Clarified exemptions for transfers related to death, dissolution, divorce, etc.;
• Altered definition of residential to include vacant land but only when buyer states they plan on using it for residential purposes (subject to reasonable reliance standard).;
• Limits record retention to only any certification made by transferee and designation agreements;
• Agreed to provide FAQs throughout implementation; and
• Does not exempt any business types from being reporting person such as attorneys

Lastly, you will notice that FinCEN upped its estimates for costs to industry. Here is what they say, “the anticipated costs of the rule would be between approximately $428.4 and $690.4 million (midpoint $559.4 million) in the first compliance year and between approximately $401.2 and $663.2 million (midpoint $532.2 million) (current dollar value) in subsequent years.” They are sticking with the 800-850k transactions number, although they suggest it might be lower given the new exemptions.   

- -FinCEN Press Release from August 28, 2024- -

Rules Address Critical Vulnerabilities in the U.S. Financial System, Protect National Security 

Today, as part of ongoing efforts to combat illicit finance and protect U.S. national security, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued two rules to help safeguard the residential real estate and investment adviser sectors from illicit finance. Both rules deliver on key lines of effort outlined in the Biden-Harris administration’s U.S. Strategy on Countering Corruption. 

“The Treasury Department has been hard at work to disrupt attempts to use the United States to hide and launder ill-gotten gains,” said U.S. Secretary of the Treasury Janet L. Yellen. “That includes by addressing our biggest regulatory deficiencies, including through these two new rules that close critical loopholes in the U.S. financial system that bad actors use to facilitate serious crimes like corruption, narcotrafficking, and fraud. These steps will make it harder for criminals to exploit our strong residential real estate and investment adviser sectors.”

The final residential real estate rule will require certain industry professionals to report information to FinCEN about non-financed transfers of residential real estate to a legal entity or trust, which present a high illicit finance risk. The rule will increase transparency, limit the ability of illicit actors to anonymously launder illicit proceeds through the American housing market, and bolster law enforcement investigative efforts.

The final investment adviser rule will apply anti-money laundering/countering the financing of terrorism (AML/CFT) requirements—including AML/CFT compliance programs and suspicious activity reporting obligations—to certain investment advisers that are registered with the U.S. Securities and Exchange Commission (SEC), as well as those that report to the SEC as exempt reporting advisers. The rule will help address the uneven application of AML/CFT requirements across this industry.

As part of the rulemaking process, Treasury carefully considered public feedback and consulted extensively with industry groups, intergovernmental partners, and other key stakeholders— including through listening sessions during the public comment periods—to develop rules that will be both effective and administrable while reducing potential burdens on businesses, including small businesses.  

FLTA will continue to monitor along with ALTA.