No reports are required today, but the rule could come back. FinCEN's Residential Real Estate Rule required closing and settlement professionals to report non-financed transfers of US residential property to entities and trusts. It took effect on 1 March 2026 after a 90-day delay (Buchalter).
What happened
- 19 March 2026: In Flowers Title Companies, LLC v. Bessent, the US District Court for the Eastern District of Texas vacated the rule, holding FinCEN exceeded its authority under the Bank Secrecy Act (Katten).
- After the ruling: FinCEN's own FAQ confirms reporting persons are not currently required to file and face no liability while the order stands (FinCEN).
- 11 May 2026: FinCEN appealed to the Fifth Circuit (Davis Wright Tremaine).
Courts disagree. Other district courts, in the Middle District of Florida and the Northern District of Texas, upheld the rule (Best Law Firms). That split is why the appeal matters.
Why private lenders should care
The rule targeted non-financed transfers, and FinCEN's definitions treated certain private and non-bank financing differently from bank-financed deals. Canadian investors who buy US homes through LLCs, often with private financing, were squarely in the frame. If the rule returns, title and closing agents will again ask for beneficial ownership details on buyers.
FinCEN's FAQ also flags an open question: if the order is overturned, FinCEN will issue guidance on whether and when reporting resumes for transfers that closed during the vacatur.
What to do now
- Keep collecting beneficial ownership information in your KYC file anyway
- Tell borrowers buying through entities that reporting may resume
- Watch the Fifth Circuit docket in Flowers Title
This content is general information for industry professionals and is not legal, tax or financial advice. Laws change and apply differently to each transaction; obtain advice from qualified counsel in each relevant jurisdiction. Legal counsel to the Cross-Border Private Lenders Association: Jasmine Daya & Co. Questions: info@cbpla.com