By Karen Burnett, Senior Vice President, Escrow Manager
We are officially into November and just ahead of my favorite holiday, Thanksgiving. Personally and professionally, I have so many things to be thankful for, and the holiday is such a great time of reflection, along with tons of food and some exceptional football!
Professionally, one of the things I am most grateful for this season is the postponement of a huge FinCEN change, which was to start on December 1, 2025. Back in July, Roland Love brought you a look ahead at the new FinCEN reporting requirement: July 2025 FinCEN Blog. As a refresher, FinCEN is a division of the U.S. Treasury Department and is charged with monitoring and preventing money laundering that may occur through certain real estate transactions. The December 1, 2025, rule aimed at expanding an existing procedure for capturing transactional data from real estate closings involving entity purchasers who were using all cash funds or borrowed funds from private sources. The new reporting requirement expanded the pool of transactions from just a handful of counties to every residential transaction, in every state, in every county, at every price point.
Understandably, the real estate industry was quite concerned about this looming change. It changed the scope so profoundly that we were looking at going from 5 to 10 FinCEN reports a month to potentially hundreds per month.
Thankfully, due to work and advocacy on many fronts, this new reporting requirement has been postponed until at least March 1, 2026, to give our industry time to adjust and perhaps to also give lawmakers time to reevaluate the true scope of the information they are looking to collect.
So, what does this mean for current practices? Well, FinCEN will continue to operate under the model they have been using for the past 12-15 years, which requires reports under a geographically specific set of parameters they call a Geographic Targeting Order or GTO. The current GTO is in place and enforceable until February 28, 2026, and captures data from transactions with these criteria:
- Residential improved real property
- Residential vacant real property with immediately contemplated construction
- Sales price of $300,000 or greater
- Texas counties of Bexar, Dallas, Harris, Montgomery, Tarrant, Travis, Webb
- Entity purchaser
- Financing with all cash, private lending, or seller financing
While we are thrilled that the start date was postponed, ideally, we would like to see FinCEN continue to operate under its GTO model instead of this expanded effort. It is not too late to continue to work with your trade association partners and legislators to perhaps make this new reporting requirement more practically workable or otherwise scrapped completely. We will continue to work with our trade association, TLTA, our underwriters, and our congressional and industry leaders urge you to do so as well. Independence Title makes considerable efforts and invests significant time and resources to fight illicit practices, so while we fully support the intention of this new reporting requirement, it’s the process that still needs work and more thought!
As we approach this time of year, we are grateful for this reprieve and will continue to bring updated information as we learn it! Happy Thanksgiving!
