"Kernodle agreed on both statutory grounds the agency cited, finding that FinCEN failed to demonstrate that non-financed residential real estate transfers to entities or trusts are categorically suspicious. The fact that some bad actors have conducted non-financed real estate transactions does not make such transactions categorically suspicious."
"If it did, then nearly every type of transaction imaginable would be suspicious. The judge noted that by FinCEN's own estimates, the rule would have covered between 800,000 and 850,000 transfers annually at a compliance cost of up to $690 million."
"For the title insurance industry and real estate operations, the decision eliminates a significant compliance burden that industry groups had railed against, citing costly reporting obligations without clear evidence of effectiveness."
A court decision vacated FinCEN's rule requiring reporting of cash real estate transactions, restoring prior regulations. Flowers Title Companies challenged the rule, arguing FinCEN lacked authority under the Bank Secrecy Act. The court found that FinCEN could only regulate objectively suspicious transactions, and non-financed real estate transfers were not categorically suspicious. The ruling eliminated significant compliance costs for the title insurance and real estate industries, which had opposed the rule due to its unclear effectiveness in combating illicit activities.
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