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FinCEN to publish proposed AML regs for residential real estate transfers

FinCEN has filed a notice of proposed rulemaking for publication in the February 16, 2024, Federal Register that would require certain persons involved in real estate closings and settlements to submit reports and keep records on identified non-financed transfers of residential real property to specified legal entities and trusts on a nationwide basis.

Transfers made directly to an individual would not be covered by this proposed rule. The proposed rule describes the circumstances in which a Real Estate Report (a streamlined version of a Suspicious Activity Report) must be filed, who must file a Real Estate Report, what information must be provided, and when such a report is due. These reports are expected to assist the U.S. Department of the Treasury; Federal, State, and local law enforcement; and national security agencies in addressing illicit finance vulnerabilities in the U.S. residential real estate sector and to curtail the ability of illicit actors to anonymously launder illicit proceeds through the purchase of residential real property, which threatens U.S. economic and national security.

Under the proposed rule, persons involved in real estate closings and settlements would continue to be exempt from the anti-money laundering compliance program requirements of the Bank Secrecy Act. However, as provided in 31 CFR 1010.205(c), no such exemption applies for a financial institution that is otherwise required to establish an anti-money laundering program.

Comments will be accepted for 60 days following publication (through April 16, 2024).