A coalition of 25 states and territories, led by Attorney General Kathy Jennings, has voiced support for proposed regulations aimed at tackling money laundering in residential real estate transactions. The coalition, in a letter addressed to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), expressed strong backing for the regulations titled “Anti-Money Laundering Regulations for Residential Real Estate Transactions.”
The proposed rules aim to curtail criminals’ ability to launder money through residential property deals. They mandate certain individuals involved in real estate closings and settlements to submit reports and maintain records on identified non-financed transfers of residential real property to specific legal entities and trusts nationwide.
Attorney General Kathy Jennings emphasized the necessity of utilizing all available tools to combat criminal exploitation of the system. She stated that the proposed regulations offer an effective and prompt measure in this regard.
The regulations, if implemented, will require businesses, including attorneys, facilitating non-financed residential property transfers to report relevant information to FinCEN. This measure is expected to enhance the accessibility of information about suspicious real estate transactions for federal, state, and local law enforcement agencies, aiding in the identification of potential illicit activities on a national scale.
The coalition’s letter highlights that the proposed regulations strike a balance between effectiveness and burden on reporting parties. It emphasizes that the reporting requirements are less stringent compared to financial institutions’ obligations and certain real estate transfers, such as those by natural persons, will be exempt from the reporting requirements.
The letter was spearheaded by Delaware, Oklahoma, New Hampshire, and Rhode Island, with the support of attorneys general from several other states and territories. The coalition draws attention to a previous successful effort led by Oklahoma Attorney General Drummond in 2023, which secured streamlined access to corporation ownership information under the Corporate Transparency Act of 2021.
The 2023 coalition, led by Oklahoma, included a total of 42 states and entities, demonstrating widespread support for measures aimed at combating money laundering and enhancing transparency in financial transactions.
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