FinCEN’s Residential Real Estate Reporting Rule - Update

Please note the following update to our Alert dated March 13, 2026:

On March 19, 2026, the Financial Crimes Enforcement Network (“FinCEN”) announced, by a posting on its website, that reporting persons are not currently required to file real estate reports under the residential real estate reporting rule referenced in our Alert dated March 13, 2026 and will not be subject to liability for failing to do so at this time.  FinCEN is pausing implementation of the rule that went into effect on March 1, 2026, that requires the reporting of certain information regarding non-financed transfers of residential real property by legal entities or trusts. FinCEN paused the reporting requirement in light of a recent federal court decision in the Eastern District of Texas, which vacated the rule in its entirety. The court found that FinCEN exceeded its statutory authority under the Bank Secrecy Act and failed to adequately explain how non-financed real estate transactions are categorically suspicious.

This decision follows two prior rulings that had rejected legal challenges to the rule. While the future of the rule remains uncertain, businesses and individuals purchasing without financing residential real property through a legal entity or trust should continue to be prepared to provide information that may be required for FinCEN reporting if the rule is reinstated.

We will continue to monitor developments in the federal courts and any additional guidance issued by FinCEN.