FinCEN Update

Federal Court in Texas Vacates New FinCEN Anti-Money Laundering Rule. We expect that order will likely be appealed.

What happened? On March 19th a federal district court in Texas vacated FinCEN’s Residential Real Estate Anti-Money Laundering rule. This is the third lawsuit that sought to have the rule overturned. FinCEN prevailed in the two other cases.

What does it mean? The order eliminates the rule as of now. The rule could be immediately reinstated should FinCEN successfully obtain an injunction as part of an appeal.

How is John Bethell Title going to proceed? After carefully considering the situation and likely scenarios, JBT decided to continue to collect reportable information for transactions that would be subject to the rule. JBT will not report that information unless legally required at some future point to do so. While in this non-reporting window, JBT will waive its usual FinCEN compliance fee. JBT will periodically review the situation and make changes to this procedure as warranted.

Why is JBT taking this course of action? If FinCEN is granted injunctive relief from the Texas Court’s order upon appeal, the reporting rule could be reinstated immediately. Should that occur, closings already scheduled may be delayed if JBT has not already collected the required data. Under the rule, the settlement agent (JBT) is the only party required to report to FinCEN. Criminal fines and penalties apply for non-compliance.