March 27, 2026

According to an article from The Title Report on March 19, 2026, a Texas federal court ordered a Financial Crimes Enforcement Network (FinCEN) rule to be vacated. The U.S. District Court for the Eastern District of Texas, in Flowers Title Companies, LLC v. Bessent, vacated FinCEN’s “Anti-Money Laundering Regulations for Residential Real Estate Transfers” in its entirety and set the rule aside nationwide effective immediately. This decision places immediate attention on the scope of FinCEN’s regulatory authority and the durability of recent rulemaking tied to reporting obligations.

The FinCEN rule in question addressed reporting obligations tied to certain non-financed residential real estate transactions, particularly those involving legal entities and trusts. FinCEN treated such transactions as inherently suspicious for purposes of Bank Secrecy Act reporting.  The court rejected that approach. The judge stated that FinCEN’s explanations were “vague, conclusory and unpersuasive.” The opinion explained that the existence of some bad actors does not render an entire category of transactions suspicious. The judge wrote that 31 U.S.C. § 5318(g)(1) requires reporting tied to “any suspicious transaction,” not broad categories defined without sufficient justification. The court held that FinCEN exceeded its statutory authority under the Bank Secrecy Act and improperly classified an entire category of residential real estate transactions as suspicious without proof or adequate explanation. The court ordered vacatur and remand.

The practical effect is immediate. The rule is not currently enforceable, absent a stay. Parties that would otherwise qualify as “reporting persons,” including title, settlement, and closing professionals, do not currently have a federal obligation to submit filings under the vacated rule. Existing anti-money-laundering, sanctions, and fraud-prevention obligations remain in place under other laws and internal policies. At a high level, the decision limits FinCEN’s ability to impose reporting obligations based on categorical assumptions of suspicious activity. This may place pressure on how future rules define and justify “suspicious transactions” under the Bank Secrecy Act.

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