Attorney General Kathy Jennings has joined a coalition of 25 states and territories in filing a letter with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) in support of proposed rules entitled “Anti-Money Laundering Regulations for Residential Real Estate Transactions.”  

The April 16 letter expresses staunch support for the would-be regulations, which will reduce criminals’ ability to launder money through residential real estate transactions. Specifically, the proposal requires “certain persons involved in real estate closing and settlements to submit reports and keep records on identified non-financed transfers of residential real property to specified legal entities and trusts on a nationwide basis.”  

The proposed regulations would help deter wrongdoing as well as provide an important tool for criminal investigations. 

“We must use every tool at our disposal to respond to bad actors who would exploit the system to conceal criminal activity,” said Attorney General Kathy Jennings. “The proposed regulations represent an effective and expedient option for doing just that.” 

The proposed regulations will: 

• Require businesses – including attorneys – performing closing or settlement functions, for a non-financed sale or transfer of residential property to any entity or trust, to collect and report information to FinCEN.   
   
• Permit federal, state, and local law enforcement to access more information about suspicious real estate transactions more efficiently from a single source.  
   
• Aid law enforcement in identifying suspicious real estate transactions on a national basis that may otherwise remain undetected. 

“This regulatory scheme strikes an appropriate middle ground and will not be unduly burdensome on the reporting parties,” the letter states. “The Real Estate Reports impose a streamlined reporting requirement that is less onerous than financial institutions’ obligations to file Suspicious Activity Reports. FinCEN will also continue to exempt persons involved in real estate closings and settlements from the Bank Security Act’s requirement to establish anti-money laundering programs. Moreover, certain transfers, including purchases of real estate by natural persons, will not be subject to the reporting requirements.” 

The letter was led by Delaware, Oklahoma, New Hampshire, and Rhode Island. Also signing on to the letter were the attorneys general of 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 led a 42-state coalition that successfully convinced FinCEN to provide state, local and tribal entities streamlined access to corporation ownership information established under the Corporate Transparency Act of 2021. 

In addition to Delaware, the 2023 coalition included Arizona, California, Colorado, Connecticut, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Commonwealth of the Northern Mariana Islands, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Vermont, Washington and Wisconsin.