Maryland Legal Alert for Financial Services
FinCEN Suspends Reporting Obligations Under Residential Real Estate Rule
Shortly after reporting in our March 13, 2026 Legal Alert, significant developments have arisen regarding FinCEN’s Residential Real Estate Reporting Rule (the “Rule”). On March 19, 2026, the U.S. District Court for the Eastern District of Texas, in Flowers Title Companies, LLC v. Bessent, vacated the Rule, holding that FinCEN lacked statutory authority under the Bank Secrecy Act and failed to adequately justify its treatment of non-financed real estate transactions as categorically suspicious.
In response, FinCEN announced on March 20, 2026, that “in light of a federal court decision, reporting persons are not currently required to file real estate reports with FinCEN and are not subject to liability if they fail to do so while the order remains in force.” FinCEN has therefore paused implementation of the Rule, which had taken effect on March 1, 2026.
These developments come against the backdrop of conflicting federal court decisions. While the Eastern District of Texas vacated the Rule in Flowers, just one month earlier, the U.S. District Court for the Middle District of Florida, in Fidelity National Financial, Inc. v. Bessent, upheld the Rule as a valid exercise of FinCEN’s authority. For now, the Rule’s enforceability remains in flux pending further court action or guidance from FinCEN.
For more information concerning this topic, please contact Tamia J. Morris