Return to the Vault: On Demand — Why All Attorneys Should Pay Attention to FinCEN’s Reporting Rule

By Mary Gallimore Walker, Andrea Davis, Natasha Branch, Malia Williams, Amy Zeko and Nancy Ferguson

Purpose of Return to the Vault

Return to the Vault (“RTTV”) exists to provide practical, timely education and connection for Real Property Section members. It’s inspired by the collaborative learning that once happened in the “vault” at Register of Deeds offices across North Carolina, where attorneys could ask questions, exchange ideas and learn from each other in real time.

While technology has made modern practice more efficient, it has also reduced those natural opportunities for conversation and shared problem-solving. RTTV is the Real Property Section’s way of creating that space again, intentionally bringing members together to connect and learn from each other.

Our monthly live RTTV programs remain the foundation of this effort. RTTV: On Demand extends that work by giving us a flexible way to share timely updates and focused guidance when issues arise between live programs.

RTTV Episode No. 1

In this installment of RTTV: On Demand, we are sharing a short video episode summarizing recent FinCEN developments and what real property attorneys need to know ahead of the March 1 effective date.

Amy Zeko, Agency Counsel for Fidelity National Title Insurance Company, highlights key updates and shares practical considerations.

This episode is hosted by Andrea Davis, Vice President and State Counsel for Chicago Title Company.

Are You a Reporting Person?

You may be the reporting person in a transaction and not even realize it! As outlined in FinCEN’s Quick Reference Guide for Reporting Persons, only one party in a reportable transaction is considered the reporting person, and that individual bears the reporting obligation. The reporting person can be identified through the Reporting Cascade or a Designation Agreement.

Under the Reporting Cascade, responsibility is assigned based on which function is performed in the transaction. The analysis proceeds in the following order:

  1. The closing or settlement agent listed on the closing or settlement statement;
  2.  If none, the person who prepares the closing or settlement statement;
  3. If none, the person who files with the recordation office the deed or other instrument transferring ownership of the residential real property;
  4. If none, the person who underwrites an owner’s title insurance policy for the transferee with respect to the transferred residential real property, such as a title insurance agency;
  5.  If none, the person who disburses, in any form, the greatest amount of funds in connection with the residential real property transfer (including from an escrow, trust, or lawyer’s trust account);
  6.  If none, the person who provides an evaluation of the status of title;
  7.  If none, the person who prepares the deed or, if no deed is involved, a person who prepares any other legal instrument transferring ownership.

If none of these functions are performed in a reportable transfer, then a report is not required.
For information on the Designation Agreement, see FinCEN, Quick Reference Guide for Reporting Persons — Are You a Reporting Person?

Important Note: The FinCEN Residential Real Estate Rule applies to reporting persons based on the functions they perform, not their professional title. As a result, it may apply to attorneys and non-attorneys alike. Additionally, the rule is not limited to traditional residential transactions; it may also apply to commercial or mixed-use transactions that include a qualifying residential component.

Helpful Reference Materials

Webinars & Recorded Programs

Disclaimer: The information provided in this post is provided for general informational and educational purposes only and is not offered for CLE credit. It does not constitute legal advice and should not replace independent professional judgment. Any third-party materials referenced are not products of the North Carolina Bar Association (NCBA), the NCBA Real Property Section or the preparers of this post. They are shared for convenience only, and the NCBA does not endorse or guarantee their accuracy or reliability.

Source: FinCEN, Quick Reference Guide for Reporting Persons — Are You a Reporting Person?

 

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