Judge backs FinCEN real estate AML rule in FNF lawsuit

"In the lawsuit, FNF claims that the rule, which was promulgated under the Biden administration, is arbitrary and capricious, and that the rule will cause it irreparable harm. The rule requires title firms to report specific details on all-cash home purchase transactions. These include the names, addresses, dates of birth, citizenship status and ID numbers of all people involved including minors, payment details and information about trusts and entities that are purchasing the property."

"Judge Horovitz disagrees with this, writing in his recommendation that under the Bank Secrecy Act, FinCEN has the clear authority to create rules designed to prevent money laundering at the federal level. According to the judge, FinCEN has shown that the rule is needed based on its experience with the prior Geographic Targeting Orders, and that despite FNF's pushback, suspicious transactions is a defined category and not overly broad."

"Additionally, while the judge acknowledged that FinCEN did not consider the costs of implementing the rule, the law-enforcement-related benefits outweigh the costs of compliance. The judge also noted that the law does not require the benefits of a rule to be precisely quantified. While this decision of the magistrate judge is not final or binding, it does strongly signal how the case may shake out unless Judge Wendy Berger, who is directly overseeing the suit, disagrees with Judge Horovitz's position."

FNF sued FinCEN, its director Andrea Gacki, the Department of the Treasury and Secretary Scott Bessent in May 2025, claiming the rule is arbitrary, capricious and will cause irreparable harm. The rule requires title firms to report detailed information on all-cash home purchases, including personal data for all people involved, payment specifics, and information about trusts and purchasing entities. FNF argued the rule exceeds FinCEN's authority and is overly broad and costly. Magistrate Judge Horovitz recommended upholding the rule under the Bank Secrecy Act, citing prior Geographic Targeting Orders and defined suspicious-transaction categories. The judge acknowledged unquantified compliance costs but concluded law-enforcement benefits outweigh them. The magistrate recommendation is nonbinding. FinCEN postponed implementation to March 1, 2026.

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