Case: Texas Eastern District – FinCEN Action
FinCEN has confirmed that, following the Flowers Title court ruling, reporting is not currently required, and there is no liability for not filing while the order remains in effect. However, the BSA E-Filing system remains active and continues to accept reports. This mirrors FinCEN’s approach during the CTA pause, indicating the rule may be reinstated.
We recommend continuing to collect the required information so you are prepared if / when reporting resumes. We will continue to monitor developments and can prepare or file reports upon request for as long as FinCEN permits.
Case: Texas Eastern District
Summary of the Case:
The case involves a legal challenge to a rule created by the Financial Crimes Enforcement Network (FinCEN) that required reporting certain residential real estate transactions. Specifically, the rule applies to non-financed transactions where property is transferred to an entity or trust.
A title company argued that FinCEN did not have the legal authority to create this rule under the Bank Secrecy Act. The court reviewed whether FinCEN’s authority allowed it to require reporting of these types of transactions nationwide. It found that FinCEN’s authority is limited to requiring reports only for “suspicious” transactions, and the agency did not adequately prove that all non-financed real estate transactions are suspicious.
The court also determined that another legal provision cited by FinCEN only allows for procedural requirements—not broad reporting mandates. Because of this, the court ruled that the regulation exceeded FinCEN’s authority. As a result, the court vacated (invalidated) the rule entirely and restored the prior status quo.
What This Means for People in the Industry:
For title companies, real estate professionals, and other reporting parties, this ruling means that the FinCEN Residential Real Estate Reporting Rule is currently not in effect. There is no legal requirement to file these reports while the court’s decision stands. This also means there is no liability for not filing during this period.
However, because the rule was struck down based on legal authority—not permanently eliminated—there is a strong possibility of appeal or future regulatory action. Industry professionals should expect continued uncertainty and potential reinstatement of reporting requirements.
As a result, many companies may still choose to collect required information to stay prepared. Operationally, this provides temporary relief from compliance burdens and reporting costs. Strategically, it reinforces the importance of staying informed and maintaining readiness for rapid regulatory changes.
Case: Jason Corley v. United States Department of the Treasury
Summary of the Case & Outcome:
This case involved a legal challenge brought by individuals against the U.S. Department of the Treasury over a federal rule related to financial reporting requirements. The plaintiffs argued that the rule was unconstitutional and exceeded the government’s authority, particularly under the Commerce Clause. The court reviewed both sides’ motions for summary judgment to determine whether the rule should be upheld or struck down.
After evaluating the legal arguments, the court found that existing legal precedent supports the government’s authority to enforce the rule. It specifically determined that the rule has a sufficient connection to interstate commerce and is valid under the Necessary and Proper Clause. Because of this, the court ruled in favor of the government and upheld the rule as constitutional.
In the outcome, the plaintiffs’ request to invalidate the rule was denied, and the government’s position was fully accepted. This means the rule remains in effect and enforceable. The decision resolves all claims in the case, leaving no remaining legal issues at this stage. The court also indicated that a more detailed explanation of its reasoning would follow in a separate opinion. For now, the key takeaway is that the challenged rule was upheld and remains in effect.
