Return to the Vault: On Demand — FinCEN Residential Real Estate Rule Update

By the Return to the Vault Committee

The Return to the Vault logo is shown with a white background and navy font. It reads "Return to the Vault: a program of the Real Property Section." There is a keyhole depicted in the A of "Vault."

Recent developments involving FinCEN’s Residential Real Estate (“RRE”) Rule continue to create uncertainty for real property practitioners. A federal court in Texas vacated the rule nationwide, and FinCEN has since issued additional guidance regarding current reporting obligations.

New FinCEN Guidance

Following the Texas decision, FinCEN released FAQs on May 18, 2026, addressing the current status of the rule.

FinCEN clarified that:

  • The RRE Rule is currently “without legal effect” while the Texas order remains in force.
  • Reporting persons are not currently required to file Real Estate Reports with FinCEN.
  • Reporting persons will not face liability for failing to file reports during this suspension period.

FinCEN also addressed retroactive reporting concerns, stating that:

  • If the Texas ruling is later overturned, reporting persons will not be required to retroactively file reports for transactions completed while the order was in effect.
  • FinCEN will issue additional guidance if and when reporting obligations resume.

Key Points of Litigation

  • FinCEN has filed a notice of appeal of the Texas ruling.
  • Separate challenges to the rule remain pending in Florida and Puerto Rico.
  • The Texas court found that FinCEN failed to establish that non-financed residential real estate transactions are categorically “suspicious” under the Bank Secrecy Act.

For now, real property lawyers should continue monitoring pending appeals and additional FinCEN guidance regarding any future reinstatement or modification of the rule.

Sources:
ALTA, FinCEN Clarifies Reporting Obligations Following Texas Court Ruling (May 19, 2026); ALTA, FinCEN Appeals Ruling Against Residential Real Estate Rule in Texas (May 15, 2026); FinCEN, Residential Real Estate Frequently Asked Questions (Issued May 18, 2026).

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