The path toward implementing FinCEN’s RRE Rule just became clearer.

In a closely watched legal challenge filed by Fidelity National Financial and related parties, a federal Magistrate Judge has now recommended that the rule be upheld in full. This is an important development for the real estate and title community—and a strong indication that the rule is on track to take effect.

Below is a brief overview of the case and what the Judge concluded.

Background: What the Case Was About

The plaintiffs—Fidelity National Financial, Inc. and Fidelity National Title Insurance Company—challenged FinCEN’s new reporting requirement for non-financed transfers of residential real property to entities or trusts.

They sued multiple government defendants, including:

  • The U.S. Department of the Treasury

  • Treasury Secretary Scott Bessent

  • FinCEN

  • FinCEN Director Andrea Gacki

The Residential Real Estate Rule was issued under the Bank Secrecy Act (BSA) and the Anti-Money Laundering Act of 2020. Its goal is to help prevent money laundering through opaque real estate transactions—particularly those involving shell companies, trusts, and all-cash buyers.

The parties filed cross-motions for summary judgment, asking the Court to rule on several legal challenges.

Four Key Legal Issues the Court Reviewed

1. Did Congress Give FinCEN Authority to Create This Rule?

Judge’s conclusion: Yes, it did.

The plaintiffs argued the rule exceeded FinCEN’s authority because it required reporting of transactions that aren’t inherently suspicious. But the Judge disagreed. He concluded that Congress gave FinCEN broad authority under the BSA to require reports that assist in identifying potential financial crime—including categories of transactions that may pose heightened risk, such as non-financed entity and trust purchases.

In short, the Judge found the rule well within FinCEN’s statutory mandate.

2. Was the Rule Arbitrary or Capricious?

Judge’s conclusion: No. FinCEN acted reasonably.

The plaintiffs argued FinCEN failed to properly weigh costs, ignored comments, and should have included a monetary threshold. The Judge found otherwise, determining that FinCEN:

  • Considered costs and benefits

  • Provided rational explanations

  • Responded to significant public comments

  • Reasonably included trusts

  • Reasonably declined to add a monetary threshold

The Judge concluded that the Rule reflects agency expertise and common-sense analysis supported by years of prior experience with Geographic Targeting Orders (GTOs).

3. Does the Rule Violate the Fourth Amendment?

Judge’s conclusion: No.

The plaintiffs argued the reporting requirement was an unreasonable search. The Judge rejected that, noting:

  • Corporations have reduced expectations of privacy under the Fourth Amendment

  • Reporting obligations are not inherently unconstitutional

  • The rule is specific, limited, and tied to a legitimate congressional purpose

This aligns with long-standing Supreme Court precedent upholding similar financial reporting laws.

4. Does the Rule Violate the First Amendment?

Judge’s conclusion: No. It requires factual reporting, not ideological speech.

The plaintiffs claimed the rule improperly compelled speech. The Judge disagreed, finding the disclosures purely factual and commercial—similar to other routine compliance obligations that courts consistently uphold.

Final Recommendation from the Magistrate Judge

The Magistrate Judge recommended:

  • Granting the Defendants’ Motion for Summary Judgment

  • Denying the Plaintiffs’ Motion for Summary Judgment

  • Entering judgment for the government

  • Closing the case

The parties now have 14 days to file any objections. If no objections are filed, or if they are denied, the recommendation will likely become the final decision of the Court.

What This Means for the Industry

While the case is not formally closed, the Judge’s recommendations strongly support the legality of the Residential Real Estate Rule. This is a meaningful indicator that the rule is poised to move forward as planned.

For title agents, real estate professionals, and closing attorneys, this decision underscores the importance of preparing now:

  • Understanding reportable transactions

  • Knowing your responsibilities under the cascade of reporting

  • Establishing internal workflows

  • Preparing designation agreements where needed

  • Using platforms like RRE Report to simplify and automate compliance

FinCEN’s effort to bring more transparency to all-cash real estate transactions is advancing—and the industry is steadily moving toward implementation.

Looking Ahead

We will continue monitoring the case and providing updates as it progresses. But for now, the message is clear: The legal foundation for the Residential Real Estate Rule is strong, and the momentum behind its implementation is growing.

Stay tuned to the RRE Resource Hub for updates, educational videos, guides, and tools to help you prepare with confidence.