FinCEN FAQs on the New Anti-Money Laundering Rule
https://main--stewart-title--stewartmarketing.aem.page/en/fincen-aml/faqs#frequently-asked-questions
Frequently Asked Questions
Have questions? We've got answers. Explore this list of FinCEN FAQs to quickly find out what you need to know about the new anti-money laundering (AML) rule.
What is FinCEN?
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the U.S. Department of the Treasury responsible for enforcing financial regulations, including the Bank Secrecy Act (BSA) and other regulatory functions. FinCEN works to combat money laundering, fraud, and other illicit financial activities by collecting and analyzing financial data.
What is the New FinCEN Anti-Money Laundering Rule?
Beginning December 1, 2025, FinCEN will require reporting for all residential transfers of real property to a legal entity or trust that are non-financed. It’s important to note that ‘residential real property’ extends beyond traditional, single-family homes, and ‘non-financed’ includes more than just all-cash transactions.
FinCEN required reports must be entered, uploaded and submitted to FinCEN by the later of either the final day of the month following the month in which the date of closing occurred, or 30 calendar days after the date of closing.
Key Highlights of the Rule:
✔ Aims to prevent money laundering, financial crimes and other illicit activities
✔ Applies nationwide, across ALL counties in the United States (no county is exempt)
✔ Targets non-financed transfers (beyond just all-cash transactions)
✔ Introduces new compliance requirements, including reporting and record-keeping
✔ Non-compliance may result in penalties and legal action
Still catching up? Check out:
What is FinCEN and the New Anti-Money Laundering Rule?
How Does the AML Rule Differ from FinCEN’s Geographic Targeting Orders (GTOs)?
FinCEN’s Geographic Targeting Orders (GTOs) have been in place since 2016 as temporary, location-specific measures requiring title companies to report certain real estate transactions in high-risk areas. Over time, these orders have expanded, covering more locations and refining reporting criteria.
The new Anti-Money Laundering (AML) rule, effective December 1, 2025, is not an extension of GTOs, it’s a permanent, nationwide regulation. Unlike GTOs, which focus on specific geographic regions, the AML rule requires reporting of all residential transfers of real property to a legal entity or trust that is non-financed, across every county in the United States and for any transferring dollar amount, including $0 gift transfers.
This shift means broader reporting requirements, expanded definitions of covered transactions, and a greater impact on businesses.
For a quick breakdown, watch:
How Does the FinCEN Anti-Money Laundering Rule Differ from Geographic Targeting Orders?
Who Will Be Affected by the New AML Rule?
The new Anti-Money Laundering rule will have the greatest impact on title insurance companies and title agents, including settlement agents, as they will primarily be responsible for reporting applicable transactions. Real estate professionals will also need to understand the AML rule to help answer client questions and navigate potential reporting requirements. Additionally, legal entities and trusts involved in real estate transfers will also need to understand the AML rule as they may be subject to new reporting and compliance obligations.
With these changes, substantial training and process updates will be required to ensure compliance and avoid potential penalties.
What qualifies as a residential transfer of real property?
FinCEN’s definition of “residential real property” goes beyond the traditional single-family home. Under the FinCEN AML rule, it includes:
- One-to-four family residences
- Vacant land intended for future one-to-four family development
- Units in buildings designed for one-to-four family occupancy (e.g., condominiums or apartments)
- Shares in a cooperative housing corporation (co-ops)
For a quick breakdown, watch:
What Qualifies as a Residential Transfer of Real Property?
What qualifies as a legal transferee entity? Are there exceptions?
FinCEN defines a transferee legal entity as any person other than a transferee trust or an individual. That includes the following, whether domestic or foreign:
- Corporations
- Partnerships
- Estates
- Associations
- Limited liability companies (LLCs)
Exceptions to the types of transferee legal entities that fall under the reporting requirement include:
- Public companies (securities reporting issuers)
- Governmental authorities
- Banks and credit unions
- Money services businesses
- Broker-dealers & financial market utilities
- Insurance companies
- State-licensed insurance producers
- Commodity Exchange Act-registered entities
- Public utilities
- Financial market utilities
- Registered investment companies
- Subsidiaries of exempted entities
For a quick breakdown, watch:
What Qualifies as a Legal Entity or a Trust?
What qualifies as a buyer/transferee trust? Are there exceptions to this?
According to FinCEN, a buyer/transferee trust is a legal arrangement where a grantor places assets under a trustee's control for the benefit of others, or for a specific purpose. Under this rule, a trust is considered a transferee trust even if the property is titled in the name of the trustee instead of the trust itself.
Exceptions to reporting requirements for trusts include:
- Estate planning trust where the transfer is made by an individual, either alone or with the individual’s spouse, to a trust of which that individual, that individual’s spouse, or both of them are the settlor(s) or grantor(s) and where the transfer does not involve any consideration
- Securities reporting issuers acting as trustees
- Statutory trusts (treated as transferee entities instead)
- Subsidiaries of exempt trusts
For a quick breakdown, watch:
What Qualifies as a Legal Entity or a Trust?
What qualifies as a non-financed transfer?
According to FinCEN, a non-financed transfer is any transfer that:
- Does not involve a loan or line of credit secured by the property, or
- Involves financing not provided by a financial institution subject to Bank Secrecy Act (BSA), AML and Suspicious Activity Reporting (SAR) rules.
This includes:
- All-cash purchases
- Seller carrybacks or private lender funding
- Transactions where the lender is not BSA/AML/SAR-regulated
In short: If there’s no loan, or the lender isn’t regulated under AML rules, it’s non-financed.
For a quick breakdown, watch:
What Qualifies as a Non-Financed Transfer?
What are the FinCEN AML rule reporting requirements?
Under the AML rule, certain transactions must be reported to FinCEN. For qualifying transactions, the report must include:
- The reporting person (typically the title settlement agent, insurance company or title agent)
- The transferee legal entity or trust receiving ownership of the property and all the entity’s beneficial owners with 25% or more ownership interest
- The transferee trust receiving ownership of the property and information related to the beneficiaries of that trust
- Any individual signing of behalf of the transferee during the transfer
- The transferor (usually the seller)
- The residential real property being transferred
- Details about the transaction itself including the total consideration being paid and certain bank source and payment details
For a quick breakdown, watch:
What Are FinCEN Anti-Money Laundering Rule Reporting Requirements?
When does a qualifying transaction need to be reported?
Reports must be uploaded and filed in the BSA filing system within a 30–60-day window after closing. A reporting person must file a Real Estate Report by the later of these two dates:
- The last day of the month following the month in which the date of the closing occurred, or
- Thirty calendar days after the closing date
What is “Reasonable Reliance” under the FinCEN AML rule?
Per the FinCEN AML rule, if you are the reporting person, you can rely on information provided by others for purposes of reporting information or to make a determination necessary to comply with the AML rule, as long as you have no reason to doubt its accuracy. However, when reporting beneficial ownership, that information:
- Must come directly from the transferee or their representative
- Must be certified in writing
Trust, but verify.
Who is responsible for reporting transactions that qualify for the FinCEN AML rule?
FinCEN has created a “Reporting Cascade.” This is a ranked list of who might be responsible for reporting a transaction. Start at the top, with the highest ranking individual or company involved in the transaction, and move down the list until an individual or company applies:
- The person/company listed as the closing or settlement agent on the closing or settlement statement
- The person/company that prepares the closing or settlement statement
- The person/company that submits transfer documents for recording
- The person/company that underwrites an owner’s title insurance policy
- The person/company that disburses the greatest amount of funds
- The person/company that provides an evaluation of the status of the title
- The person/company that prepares the deed or, if no deed is involved, any other legal instrument that transfers ownership (in co-ops the person who prepares the stock certificate)
Only one party is responsible: the highest-ranking applicable person or company on this list.
For a quick breakdown, watch:
Who is Responsible for Reporting?
What are Designation Agreements?
Under the FinCEN AML rule, a Designation Agreement allows one party in the reporting cascade to delegate reporting responsibilities to another party within the same cascade. Designation agreements are as follows:
- A separate, written designation agreement is required for each transaction.
- This agreement transfers compliance liability for filing.
- A designation agreement may only be entered into with respect to someone else in the reporting cascade.
- 3rd party contractors may still be used to file and report on someone’s behalf but there is no transfer of liability.
Are there exceptions to the FinCEN AML Rule?
Aside from the exceptions to transferee entities and trusts, there are other standard exceptions to the AML rule. Transactions in the following categories are exempt from reporting:
- Transfer related to an easement
- Transfer resulting from death (by will, trust, contract, or operation of law)
- Transfer related to divorce
- Transfer to a bankruptcy estate
- Transfer supervised by a court in the U.S.
- Transfer for no consideration when made to a qualifying trust i.e., when an individual, either alone or with the individual’s spouse, transfers to a trust of which that individual, that individual’s spouse, or both of them are the settlor(s) or grantor(s)
- Transfer to a qualified intermediary in a 1031 exchange
- Transfer for which there is no reporting person
For a quick breakdown, watch:
What are Exceptions to FinCEN Anti-Money Laundering Rule?
What are the penalties for non-compliance of the FinCEN AML rule?
Civil penalty:
- Fines between $1,394 and $108,489 for each violation
- Each day a violation continues = a separate violation
- Failing to file or filing false/incomplete info is a violation
- In addition, the Secretary of the Treasury may bring a civil action to enjoin the violation
Criminal penalty:
- Up to $250,000 in fines and/or 5 years in prison for willful noncompliance
For more information, visit:
For a quick breakdown, watch:
What are the Penalties for Not Reporting?
What if there are multiple legal entities involved in the transaction?
How is this rule enforced? Will FinCEN audit transactions?
How do I know if a transaction is considered reportable under the FinCEN AML rule?
Open this printable flowchart to determine whether a transaction is reportable under the FinCEN AML rule.
https://stewart.com/content/dam/stewart/PDFs/fincen-aml/646697-25-sisco-fincen-aml-reporting-flow-chart-fly.pdf
FinCEN AML Reporting Flowchart (pdf)
