FinCEN Announces Efforts to Address Vulnerabilities in Real Estate Market, Modernize Rules More Broadly
FinCEN recently announced an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on potential requirements under the Bank Secrecy Act (BSA) for certain persons involved in real estate transactions to collect, report, and retain information. FinCEN intends for this rulemaking to address systematic money laundering vulnerabilities presented by the U.S. real estate sector which allow illicit actors to launder criminal proceeds via real estate purchases, thereby threatening national security and the integrity of the U.S. financial system.
More specifically, FinCEN is considering how best to focus its regulatory attention on residential and commercial real estate transactions, including the appropriate respective approaches given the kinds of money laundering threats presented by each sector. The ANPRM seeks comments on whether FinCEN should impose nationwide recordkeeping and reporting requirements on certain persons participating in transactions involving non-financed purchases of real estate, as well as more general information about risks of various illicit financial activities in the real estate market and how reporting requirements may handle that risk. Moreover, FinCEN is seeking comment on scope for potential future regulations in this space, including, for example, the persons who should be subject to the requirements; which types of real estate purchases should be covered; what information should be reported and retained; the geographic scope of such a requirement; and the appropriate reporting dollar-value threshold. Written comments on the ANPRM may be submitted by February 7, 2022.
FinCEN also recently announced a request for information (RFI) more broadly addressing how to streamline, modernize, and update the U.S. anti-money laundering and countering the financing of terrorism regime, with a focus on how to modernize related risk-based regulations and guidance issued pursuant to the BSA. This latest RFI is also intended to help FinCEN as it formally reviews BSA regulations and related guidance. Written comments to the RFI may be submitted by February 14, 2022.
