Add “money laundering” to the list of things that are pushing up residential real estate prices in the U.S.
A federal agency wants to combat money laundering in the U.S. residential real estate market with a new transparency rule.
The proposed rule would require professionals involved in real estate closings and settlements to report information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). They’d have to report information about non-financed transfers of residential real estate to legal entities or trusts.
The proposal is tailored to target residential real estate transfers considered to be high-risk for money laundering, while minimizing potential business burden, and it would not require reporting of transfers made to individuals, officials said.
“Illicit actors are exploiting the U.S. residential real estate market to launder and hide the proceeds of serious crimes with anonymity, while law-abiding Americans bear the cost of inflated housing prices,” FinCEN Director Andrea Gacki said in a statement.
The National Association of Realtors, America’s largest trade association, said it backs the move.
“NAR will continue to work to ensure the integrity of real estate transactions and to combat money laundering and illicit financing,” a spokesperson told The Center Square. “In issuing this new proposed rule, NAR agrees with FinCEN’s functional reporting approach, expecting that the reporting obligation would generally apply to settlement agents, title insurance agents, escrow agents, and attorneys. NAR remains committed to educating its members on this topic and looks forward to working with FinCEN, Congress, regulators, and other industry leaders to combat this issue.”