An appeal filed earlier this month by the Financial Crimes Enforcement Network (FinCEN) seeks to reverse a court decision vacating a rule requiring title insurance companies to report details of millions of residential real estate transactions.

That nationwide anti-money laundering (AML) rule was overturned March 19 by U.S. District Judge Jeremy Kernodle of the Eastern District of Texas — after the law had been in effect for less than three weeks.

FinCEN filed the notice of appeal with the U.S. Court of Appeals for the Fifth Circuit through the Department of Justice on May 11.

The AML rule mandated reporting for any non-financed residential real estate transfer where ownership was held by an entity or trust — with no geographic or price threshold. March’s decision in Texas vacated the rule entirely and restored the status quo that existed before the regulation took effect.

Flowers Title Companies, LLC, the plaintiff in Texas, successfully challenged the rule under the Administrative Procedure Act, arguing that FinCEN lacked authority under the Bank Secrecy Act to impose such sweeping reporting requirements.

Kernodle agreed — finding that FinCEN failed to demonstrate that non-financed residential real estate transfers to entities or trusts are categorically suspicious.

Federal rulings conflict

Despite the AML rule being vacated by the Eastern District of Texas in March, a separate earlier ruling in Florida upheld the AML reporting requirements.

That legal process began in May 2025 with litigation filed by Fidelity National Financial (FNF) — listing FinCEN and its director Andrea Gacki, as well as the Department of the Treasury and its secretary Scott Bessent as defendants.

That decision to uphold the AML rule, announced in February, has since been appealed by FNF in the Eleventh Circuit, which sets the table for possible Supreme Court intervention.

Updated FinCEN guidance

FinCEN provided updated best practices for title insurance and real estate professionals on its website following this month’s appeal.

“Reporting persons are not currently required to file Real Estate Reports (RRE) with FinCEN and are not subject to liability if they fail to do so while the court’s order remains in force,” FinCEN stated.

Updates also touched on whether reporting persons are required to retroactively file reports — should the rule be reinstated.

“If the court’s order is overturned and the RRE Rule again becomes legally effective, reporting persons will not be required to file reports for covered transactions that would have been required to be reported while the court’s order was in force,” FinCEN said. “If the order is overturned, FinCEN will provide further guidance on when reporting will be required.”

This post was originally published on here.