FinCEN Clarifies Reporting Obligations Following Texas Court Ruling

May 19, 2026

The Financial Crimes Enforcement Network (FinCEN) released three new frequently asked questions May 18 clarifying the status of its Residential Real Estate Rule following a federal court decision in Texas that vacated the regulation nationwide.

The guidance confirms that reporting persons currently are not required to file Real Estate Reports with FinCEN and will not face liability for failing to do so while the court’s order remains in effect.

The FAQs stem from a March 19 ruling by the U.S. District Court for the Eastern District of Texas, which determined FinCEN lacked the legal authority to issue the rule. The court ordered the rule vacated, effectively suspending the nationwide reporting framework for covered residential real estate transactions involving legal entities and trusts. FinCEN has appealed the Texas ruling.

In the first FAQ, FinCEN acknowledged the Texas court ruling rendered the rule “without legal effect” while the order remains in force. However, the agency also noted that two other federal judges rejected separate legal challenges to the rule. 

The second FAQ directly addresses whether reporting obligations remain in place during the appeal process.

“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 court’s order remains in force,” the agency stated.

The third FAQ addresses whether companies would need to retroactively file reports for transactions completed during the suspension period if the court’s order is later overturned. FinCEN said the answer is no.

“If the court’s order is overturned and the RRE Rule again becomes legally effective, reporting persons will not be required to file reports for covered transactions that would have been required to be reported while the court’s order was in force,” the agency stated.

FinCEN added that if the rule is reinstated, the agency will issue additional guidance explaining when reporting requirements would resume. The FAQs provide some near-term operational clarity for the title industry, though uncertainty remains as the appeal moves forward through the federal court system.

Meanwhile, in Florida, Fidelity National Financial Inc. and Fidelity National Title Insurance Co. in April asked the U.S. Court of Appeals for the Eleventh Circuit to review a lower court decision that denied the company’s motion for summary judgment and instead ruled in favor of FinCEN.

Fidelity’s appeal stems from a case in the Middle District of Florida, where the court upheld FinCEN’s authority to issue the rule under the Bank Secrecy Act. Judge Wendy Berger adopted a magistrate judge's recommendation, granting summary judgment to the Treasury and dismissing Fidelity’s challenge, allowing the AML regulations to proceed. Fidelity is now seeking appellate review of both the February ruling and the final judgment entered the following day.

Another lawsuit filed in the U.S. District Court for the District of Puerto Rico challenges FinCEN's rule on similar procedural and constitutional grounds (Puerto Rico v. FinCEN, No. PRD-191360). This complaint alleges that the rule exceeds statutory authority, violates the Administrative Procedure Act (APA) and imposes unreasonable compliance burdens. These arguments mirror those made in the other cases. The plaintiffs seek declaratory and injunctive relief to prevent enforcement of the rule as applied to transfers within Puerto Rico.

ALTA Advocacy

Sharing concerns with FinCEN's rule was one of the core discussion points attendees of the 2026 ALTA Advocacy Summit shared with members of Congress during Capitol Hill Day on May 13.

ALTA continues to engage with FinCEN and is pushing for more clarity around the rule, urging that any future changes come with adequate notice and a reasonable implementation period.

ALTA submitted a letter to FinCEN Director Andrea Gacki outlining recommendations to reduce the Rule’s burden on title professionals. Specific changes ALTA would like FinCEN to make to the rule include:

  • Impose a nominal dollar threshold, as included in other anti-money laundering regulations, to exclude gratuitous and low-value transfers and focus reporting on higher-value transactions.
  • Exempt transfers from a seller to an entity the seller controls, such as a single-member LLC or revocable living trust, which represent a change in the form of title not beneficial ownership.
  • Exempt transfers that are the result of foreclosure proceedings, whether judicial or otherwise.
  • Limit payment information collection to what settlement agents can realistically obtain, such as information available on a wire transfer receipt or on the face of a check.
  • Eliminate seller and transferor information collection. Collecting seller tax identification numbers and financial details adds significant workflow burden while its law enforcement value remains unclear.
Get Involved
  • Join the Title Action Network to make sure you’re responding to developments around the FinCEN rule or weighing in on pending legislation or regulation.


Contact ALTA at 202-296-3671 or [email protected].