Mar 20 • John G. George, Jr., OP-ED

FinCEN’s Real Estate Reporting Rule Vacated: What It Means for Texas Real Estate Professionals

On March 19th, a federal court in East Texas did something you don’t see every day—it wiped a brand-new federal rule off the books.

In Flowers Title Companies, LLC v. Bessent, the court vacated FinCEN’s “Anti-Money Laundering Regulations for Residential Real Estate Transfers.” In plain English: the rule is gone (for now).

Let’s break down what happened and why it matters.

What Was the FinCEN Rule Trying to Do?

FinCEN’s rule targeted non-financed residential real estate transactions—think all-cash deals—when buyers used legal entities or trusts.

The rule would have required reporting detailed information about:
  • The parties involved
  • The beneficial owners behind entities and trusts
  • The transaction itself

The goal? Combat money laundering in real estate. A fair goal, but as this case shows, good intentions don’t override legal limits.

What Did the Court Say?

The court’s message was straightforward: FinCEN overstepped its authority.  Two key takeaways from the ruling:

1. Not Everything Is “Suspicious”

FinCEN relied on a statute that allows reporting of “suspicious transactions.”

The problem? They treated an entire category of transactions (non-financed deals) as suspicious.

The court wasn’t buying it. Just because some bad actors use all-cash purchases doesn’t mean every all-cash deal is suspicious. If that were the rule, nearly every transaction in the economy could be labeled “suspicious.”

That’s not how the law works.

2. The Statute Didn’t Authorize This Rule


 FinCEN also pointed to another provision allowing it to require procedures from financial institutions.

The court said: That provision allows internal compliance procedures, not new reporting obligations like this one.

In short: FinCEN tried to stretch its authority. The court said the statute doesn’t stretch that far.

What Does “Vacated” Actually Mean?

“Vacated” is a powerful word. It doesn’t mean “paused.” It doesn’t mean “under review.”


It means the rule is set aside and no longer in effect. As of now, the reporting requirements tied to this rule are not enforceable.

What Happens Next?

This story is almost certainly not over.  Possible next steps include:
  • Appeal to the Fifth Circuit
  • A revised rule from FinCEN
  • Congressional action (less likely, but always possible)

Bottom Line

FinCEN tried to regulate a wide swath of residential real estate transactions.
A Texas court said: not like this.  For now, the rule is gone.

But if you’re in the real estate world, keep your head on a swivel.  This area is evolving quickly, and the next version of this rule may already be on the drawing board.

 View the Court's Order

Disclaimer

This post is for informational purposes only and does not constitute legal or professional advice. The opinions expressed are solely those of the author and should not be attributed to any agency, association, organization, or employer. Readers should consult with qualified professionals regarding their specific circumstances.

About the Author

John G. George, Jr. is a real estate attorney, instructor, speaker, and expert witness with deep roots in the Texas real estate community.

For more than 18 years, John has been a trusted advisor to leading real estate professionals and principals, known for blending legal expertise with practical, real-world guidance.

John currently serves as Co-Chair of the Texas Real Estate Commission Broker-Lawyer Committee, where he was twice appointed by the President of the State Bar of Texas to six-year terms (2017–2023 and 2023–2029). His fellow committee members elected him Co-Chair in 2022. He also serves as a subject matter expert for the mandatory TREC Broker Responsibility and Legal Update continuing education courses, and is one of only two TREC instructors who currently teach the instructor courses.

In addition to teaching, John is a frequent speaker at industry conferences, broker events, and continuing education programs. He is also the founder of Special Provisions, LLC, a company dedicated to elevating the profession by offering in-depth analysis of real estate contracts and legal issues, risk management resources for brokers and agents, and continuing education programs.

John began his legal career handling complex jury and bench trials in state, federal, and bankruptcy courts nationwide, representing clients ranging from individuals to Fortune 50 companies. Over time, his passion for real estate led him to focus on advising brokers, agents, buyers, sellers, lenders, and title companies across a variety of legal and business matters. In 2019, he co-founded Hometown Title, serving as Chief Operating Officer and General Counsel until successfully divesting his interest in 2023. John is Managing Member of George PLLC and also serves clients as Of Counsel at Simple Law TX, a firm that helps individuals and businesses with real estate, probate, estate planning, and business matters.