FinCEN Extends SAR Reporting Requirements to Certain Real Estate Transactions

FinCEN has published final regulations requiring the filing of a special real estate Suspicious Activity Report (SAR) with FinCEN when residential property is purchased in cash by certain trusts and other entities. The new regulations take effect in July 2025.

According to FinCEN, cash-only transactions to purchase residential real estate are a common form of money laundering, for which there must be nationwide reporting requirements. The most important element of the regulation for our purposes is that it explicitly excludes credit unions and their employees from the reporting requirements. However, this exception would presumably not apply to a CUSO owned by a credit union.

Who is required to file a SAR? The regulation adopts a “cascading rule” to determine who must ultimately report a real estate transaction. Specifically, it includes a list of seven different functions that a real estate professional may perform in transferring residential real property. For example, under the regulation, the real estate agent listed on a closing or settlement statement would have the initial obligation to report the SAR. Still, if for some reason the real estate agent does not do so, then the obligation would fall on any person who prepared the closing statement. Even if a credit union employee performed one of these functions, it would not be subject to the reporting requirement.