On March 19, 2026, the U.S. District Court for the Eastern District of Texas (in Flowers Title Companies, LLC v. Bessent) vacated FinCEN’s Anti-Money Laundering Regulations for Residential Real Estate Transfers (the RRE Rule). As described in a February GT Alert, the RRE Rule, which took effect March 1, 2026, required reporting of certain non-financed residential real estate transfers to entities and trusts, imposing obligations that would have applied to title companies, closing agents, title insurers, and other real estate settlement professionals involved in those transfers.
The court, however, found that FinCEN exceeded its statutory authority under the Bank Secrecy Act (BSA). The BSA permits reporting of “suspicious transactions,” but the court noted that FinCEN failed to explain how non-financed residential real estate transactions are categorically “suspicious.” Furthermore, the court rejected FinCEN’s argument that § 5318(a)(2) independently empowers required reporting to enforce the BSA, concluding that FinCEN’s interpretation “smuggles expansive reporting authority into a provision that is focused on procedures.” For these reasons, the court ordered that the RRE Rule be vacated. FinCEN filed a Notice of Appeal in the Fifth Circuit on May 11, 2026.