Afederal judge in the Northern District of Texas on Wednesday vacated the Financial Crimes Enforcement Network's (FinCEN) 2025 rule requiring title insurance companies to identify and report beneficial owners of all-cash residential real estate purchases over $300,000.
The rule, which was set to take effect August 1, 2026, was challenged by the Texas Real Estate Title Association and several industry groups. Judge Matthew Kacsmaryk ruled that FinCEN exceeded its statutory authority under the Bank Secrecy Act, finding that the law does not explicitly authorize the agency to regulate real estate transactions.
FinCEN had estimated the rule would cover 1.2 million transactions annually and would help expose money laundering by drug cartels, Russian oligarchs, and other criminals. The agency reported that 35% of all-cash purchases in six major U.S. cities involved shell companies with opaque ownership.
Appeal and legislative response
The Treasury Department announced it will appeal the ruling to the Fifth Circuit. 'This decision leaves a critical gap in our anti-money laundering defenses,' said FinCEN Director Andrea Gacki. 'We are exploring all options, including asking Congress to clarify our authority.'
Senator Sheldon Whitehouse (D-RI) said he would introduce legislation explicitly authorizing FinCEN's real estate rule. Similar bills have failed in previous sessions due to real estate industry opposition.
This decision leaves a critical gap in our anti-money laundering defenses. Criminals have already started moving money back into anonymous luxury real estate.
The ruling does not affect state-level disclosure requirements. California, New York, and Florida have their own beneficial ownership rules, but most states do not.
