A federal court has struck down a rule that forced title companies to collect and report private details about the people involved in non-financed real estate transactions in residential property, particularly those involving business entities or trusts.
The March 19 ruling was in favor of Flowers Title Companies, a family-owned title business in Tyler.
A district court in the Eastern District of Texas vacated the Financial Crimes Enforcement Network’s real estate reporting rule as exceeding the agency’s statutory authority under the Bank Secrecy Act.
The Pacific Legal Foundation, which represents Flowers Title Companies free of charge, says the ruling curbs FinCEN’s “sweeping power.”
“FinCEN claimed sweeping power to require reporting anytime someone pays cash for a house,” said Luke Wake, an attorney with PLF. “But Congress limited FinCEN to regulating only objectively ‘suspicious’ transactions; that was not a license for the agency to require reports simply because the government might find the data useful.”
Celia Flowers built her title company from the ground up, starting as a high school student with a dream of owning a business, a press release states.
She and her daughter, Erica Hallmark, operate a company licensed in more than 80 Texas counties. When FinCEN finalized its rule in 2024, they faced costly new compliance obligations, and severe penalties if they should make any reporting mistake on their clients’ legitimate transactions.
“(Flowers Title) helps thousands of property buyers every year by providing title services and insurance for real estate transactions,” PLF states on its website. “Across Texas, title companies have seen a recent uptick in so-called “cash purchases”—any transaction where the buyer doesn’t require a bank loan—as people relocate from states like California, where housing costs are much higher.
“Along with the rise in cash transactions, however, comes a serious new threat from Washington.”
The court agreed with PLF on every statutory argument, finding that cash real estate transfers to entities and trusts are not categorically “suspicious” under the Bank Secrecy Act.
Critically, the ruling vacates the rule nationwide, delivering relief not just to Flowers Title but to all affected businesses.
The case is Flowers Title Companies, LLC v. Bessent.
