The Financial Crimes Enforcement Network (FinCEN), an agency within the U.S. Treasury charged with combatting money laundering and financing of terrorism, has renewed the Geographic Targeting Orders (GTOs) that impose data collection and reporting requirements on title companies involved in certain residential real estate transactions, effective November 12, 2019, through May 9, 2020.
The GTOs cover the geographic areas listed below, which remain unchanged from the last order, for residential non-financed transactions of $300k and above:
- California - San Diego, Los Angeles, San Francisco, San Mateo, and Santa Clara Counties
- Florida - Miami-Dade, Broward, and Palm Beach Counties
- Hawaii - City and County of Honolulu
- Illinois – Cook County
- Massachusetts – Suffolk and Middlesex County
- Nevada – Clark County
- New York - Brooklyn, Queens, Bronx, Manhattan, and Staten Island
- Texas - Bexar, Tarrant and Dallas Counties
- Washington – King County
While the GTOs do not impose any new obligations on real estate professionals, a title company or its agents or subsidiaries subject to the GTO may need to consult with the real estate professional to obtain information necessary to maintain their compliance with the order. GTO compliance should not affect the real estate sales transaction or timeline for closing as reporting to FinCEN is required within 30 days of the closing.
The GTOs require certain title companies to identify natural persons with a 25 percent or greater ownership interest in a legal entity purchasing residential real property. A legal entity is defined as a corporation, limited liability company, partnership, or other similar business entity, whether formed under the laws of a state, or of the United States, or a foreign jurisdiction. Under this latest renewal, a legal entity does not include businesses whose common stock/equity interests are regulated by the Securities Exchange Commission.
Title companies, and their agents, must file a report with FinCEN regarding covered purchases of residential real property meeting the requirements above when any part of such purchases are made:
- Without a bank loan or similar external financing, and
- Is paid at least in part by using currency or a cashier’s check, a certified check, a traveler’s check, a personal check, a business check, a money order in any form, a funds transfer, or virtual currency.
The GTOs are helpful to FinCEN’s efforts to crack down on money laundering and the financing of terrorism through various illicit enterprises including foreign corruption, organized crime, fraud, narcotics trafficking, and other violations.
For more in-depth information, visit NAR’s Money Laundering and Terrorism Financing homepage.
To learn more about GTOs and FinCEN’s anti-money laundering efforts, watch NAR’s Window to the Law: FinCEN’s GTOs Extended and Expanded.
For real estate professionals’ responsibilities under the law, check out NAR’s Anti-Money Laundering Guidelines of Real Estate Professionals developed with the help of FinCEN.