The U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) is responsible for collecting and analyzing data from U.S. financial transactions to help combat financial crimes, including money laundering. On February 7, FinCEN proposed a new rule that would require information about certain all-cash real estate transactions to be reported to FinCEN. 

Current Rule - FinCEN has long considered real estate transactions to be a potential arena for financial crimes. In an effort to target and reduce financial crimes related to real estate transactions, FinCEN previously implemented Geographic Targeting Orders (GTOs). The GTOs cover 34 American cities and counties^[1] and require reporting of certain information to the federal government in all-cash residential real estate transactions of $300,000 or more (except in the City and County of Baltimore, where the threshold is $50,000). 

Proposed Rule - FinCEN’s proposed new rule represents a significant expansion of reporting requirements from the current GTO system. The proposed rule applies to the whole country, not just the areas currently included in GTOs. Moreover, the proposed rule removes the monetary threshold for reporting, and instead would require reporting of any qualifying all-cash real estate transactions, as well as gifts and other transfers of residential property without consideration. Importantly, however, the reporting requirements would not apply to transfers of property to individuals, as the rule is instead targeting transfers to entities such as trusts, businesses, etc. The proposed rule places the reporting requirements on real estate professionals, rather than consumers, and would apply to all real estate licensees, as well as other professionals involved in the sale of property. The proposed rule would require real estate licensees to report information about the entity receiving the property, including the entity’s owners, the transferor of the property, the payments made on the property, and information about the property itself. 

FinCEN is accepting written comments regarding this proposed rule until Tuesday, April 16, 2024. Comments can be submitted in the following ways:

• Federal E-rulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments. Refer to Docket Number FINCEN-2024-0005 and RIN 1506- AB54
• Mail: Policy Division, Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-2024-0005 and RIN 1506-AB54

^[¹^]The GTOs are: i) certain counties within the following cities: Boston, Chicago, Dallas-Fort Worth, Houston, Las Vegas, Laredo, Los Angeles, Miami, New York City, San Antonio, San Diego, San Francisco, Seattle, and parts of the DMV (Washington D.C., Maryland, and Virginia); ii) the City and County of Baltimore; iii) the Counties of Fairfield and Litchfield, Connecticut; iv) the Counties of Adams, Arapahoe, Clear Creek, Denver, Douglas, Eagle, Elbert, El Paso, Fremont, Jefferson, Mesa, Pitkin, Pueblo, and Summit, Colorado; v) the islands of Honolulu, Maui, Hawaii, and Kauai.