Texas Court Vacates FinCEN Real Estate Reporting Rule

JD Supra Finance & Banking

Filed March 19th, 2026

Detected March 31st, 2026

Summary

A federal district court in Texas vacated FinCEN's Residential Real Estate Rule, which had taken effect on March 1, 2026. The court held that FinCEN exceeded its statutory authority under the Bank Secrecy Act when enacting the rule requiring federal reporting of certain non-financed residential real estate transactions involving legal entities or trusts. FinCEN has updated its website to confirm that filing real estate reports is no longer required at this time.

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What changed

On March 19, 2026, the U.S. District Court for the Eastern District of Texas issued a ruling vacating FinCEN's Residential Real Estate Rule, finding that FinCEN acted beyond its authority granted by the Bank Secrecy Act. The rule, which had been in effect for less than three weeks, required reporting of non-financed residential real estate transactions where a legal entity or trust was the buyer. The court ordered the rule vacated, and FinCEN has acknowledged the ruling and updated its website accordingly.

Real estate professionals, buyers, and their advisers who had begun preparing to comply with the rule should discontinue those efforts immediately, as there is no longer a legal requirement to file real estate reports with FinCEN for covered transactions. Compliance teams should update their AML procedures to remove this requirement. Note that this is a district court ruling and may be subject to appeal; entities should monitor for further developments.

What to do next

Cease preparation and filing of FinCEN real estate reports for covered transactions
Update AML compliance procedures to remove the Residential Real Estate Rule requirements
Monitor for potential appeal or legislative changes that could restore the reporting requirement

Source document (simplified)

March 30, 2026

Reporting Requirements Under FinCEN Residential Real Estate Rule Temporarily Paused

Hannah Mink Buckingham, Doolittle & Burroughs, LLC + Follow Contact LinkedIn Facebook X Send Embed

On March 19, 2026, a federal district court in Texas issued a ruling vacating the Financial Crimes Enforcement Network (“FinCEN”) Residential Real Estate Rule, which went into effect on March 1, 2026.

The Residential Real Estate Rule was enacted by FinCEN in order to mitigate the risk of money laundering in residential real estate transactions. The Rule required federal reporting of certain non-financed residential real estate transactions involving a legal entity or trust as the buyer.

The U.S. District Court for the Eastern District of Texas held that in enacting the Residential Real Estate Rule, FinCEN exceeded the authority granted to it by the Bank Secrecy Act, and the Court ordered that the Residential Real Estate Rule be vacated. FinCEN acknowledged the Court’s ruling and has updated its website to reflect that filing a real estate report is not a requirement at this time.

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