Attorney General Kathy Jennings has aligned with a coalition of 25 states and territories to support new regulations proposed by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). These rules, titled “Anti-Money Laundering Regulations for Residential Real Estate Transactions,” aim to reduce money laundering activities through real estate.
The coalition's letter, dated April 16, endorses the regulations designed to curb criminal activity in real estate dealings. The proposal mandates that "certain persons involved in real estate closing and settlements submit reports and keep records on identified non-financed transfers of residential real property to specified legal entities and trusts on a nationwide basis."
These measures are intended to prevent illegal activities and assist in criminal investigations. Attorney General Kathy Jennings stated, "We must use every tool at our disposal to respond to bad actors who would exploit the system to conceal criminal activity. The proposed regulations represent an effective and expedient option for doing just that."
The regulations would require businesses, including attorneys involved in closing or settlement functions for non-financed sales or transfers of residential property, to report information to FinCEN. This would allow law enforcement at all levels more efficient access to data about suspicious transactions from a single source. It is also expected to help identify potentially illegal transactions nationwide.
The letter clarifies that these rules are not excessively burdensome: "This regulatory scheme strikes an appropriate middle ground and will not be unduly burdensome on the reporting parties," it states. "The Real Estate Reports impose a streamlined reporting requirement that is less onerous than financial institutions’ obligations." Additionally, certain transactions like purchases by natural persons will be exempt from these requirements.
Delaware led this initiative along with Oklahoma, New Hampshire, and Rhode Island. Other supporters include attorneys general from Alaska, Arizona, California, Colorado, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, Pennsylvania, South Dakota, Tennessee, Vermont, and the U.S. Virgin Islands.
In 2023, Oklahoma AG Drummond spearheaded a 42-state effort that persuaded FinCEN to grant state-level authorities streamlined access to corporate ownership data under the Corporate Transparency Act of 2021. That coalition included many states now supporting the current proposal.