Open Forum

We've updated the FinCEN vs. Fidelity case tracker with FinCEN's new response from yesterday.

They are pushing back hard in the 20 page response. Full version and summary is on the tracker page -

FinCEN Real Estate Report Court Case Tracker

Next step in the case is the hearing on the 30th. That's a big one that decides a lot. The form on the top of tracker page will deliver updates to your email if you want to stay on top of the updates easily.

Charles, thanks for the update!  It will be interesting to see how the court rules later this month or early next. 

No problem Thomas! Absolutely will be good to have some clarity from this case. The hearing on the 30th is pivotal for the regulation.

You're 100% right. You can't transfer liability to a third party with a designation agreement. What you want to instead do is shift much of the responsibility through a service agreement with the third party. Third-parties can provide a filing guarantee and can insure that process to protect you. We had to work through this with carriers on our Corporate Transparency Act filing service before this new Real Estate Report (RER) solution.

This still leaves two key elements you need to be careful about:

1. Make sure reporting services are ordered from the third-party whenever a transaction requires it (free exemption checkers can confirm).

2. Do not close if a customer refuses to provide the required information.

A solid third-party service agreement with insurance backstops can handle the rest. The third party must collect information correctly, have customers certify under reasonable reliance, and complete FinCEN filings after closing. To do this, they need purpose-built tools for tracking, certification, and customer follow-up before closing (including phone calls if needed). FinCEN filings are a very specific workflow.

What that looks like as a process: 1. You order report in a secure portal. 2. Third-party gets to work collecting, answering customer questions, and notifies you when everything is collected ahead of your closing date ("FinCEN clear-to-close"). 3. You close. 4. Third-party files for you and provides confirmation forms for your records. This should also eliminate hiring staff and limit time commitments per report (on your side) to under 5 minutes per report.

Billing for the service should also align with your model, meaning not billing you for FinCEN services when your transactions don't reach closing for whatever reason.

Hope that adds some clarity!