ALTA throws support behind Fidelity in FinCEN lawsuit

Filed in May 2025, the suit challenges FinCEN’s anti-money laundering rule, which requires title firms to report specific details on all-cash home purchase transactions. These include the names, addresses, dates of birth, citizenship status and ID numbers of all people involved — including minors, payment details and information about trusts and entities that are purchasing the property. The rule was promulgated under the Biden administration and is set to go into effect in December 2025. 

In addition to FinCEN, the suit also names the Department of the Treasury and its secretary, Scott Bessent, as well as FinCEN director Andrea Gacki as defendants.

In its proposed brief,  ALTA tells the court that complying with FinCEN’s new reporting requirements will cost far more than the agency’s estimate of roughly $560 million, as the reporting forms, which have over 110 data fields — half the number of fields required by the existing Geographic Targeting Order forms — will require the industry’s numerous small businesses to hire more staff and invest in new technology. Additionally, the trade group notes that title companies, which will do most of the reporting, lack the experience, resources or authority to collect all of the required beneficial ownership information. 

ALTA also notes that while FinCEN assumed minimal training would be needed, it argues this couldn’t be farther from the truth.

“Putting aside that FinCEN only estimated another 30 minutes of training for the Report, FinCEN failed to acknowledge the simple, basic point of the commentators: the lack of anti-money laundering reporting experience coupled with the complexity of the Rule and Report will require many hours of training,” the filing states.

Storage of the reports

The trade group also argues that title firms will need to store the reports due to the sensitive information on the BOI certificates, which will increase costs for securing the sensitive information. 

“FinCEN relied on this belief to dismiss commentator concerns about the technological costs associated with new or upgraded software and ‘certain non-monetary costs in the form of increased technology and cybersecurity-related risk.’ Under FinCEN’s reasoning, by not being required to store ‘high risk’ information, such as copies of filed Reports containing BOI, a small business facing the Rule’s new requirements has only marginal recordkeeping costs,” ALTA states in the filing. “This prediction is baseless. Many reporting persons invariably will retain sensitive information, particularly if they wish to defend against downstream FinCEN claims of failure to file required Reports. They therefore will incur substantial costs to ensure that customer information is safely obtained and stored.”

Requirements are speculative

ALTA also argues that the benefits FinCEN has claimed will come out of the new reporting requirements are speculative, noting that in 2021, 0.07% of all sales were related to money laundering schemes. In addition, the filing states that the preexisting “Customer Due Diligence Rule” (CDD) already requires banks to collect beneficial ownership information when persons or entities open accounts, which ALTA claims makes this new rule redundant. 

“FinCEN states that the Rule is necessary because it ‘covers non-financed transfers of residential real estate that do not involve financial institutions covered by the CDD Rule.’ That is a red-herring. Funds obtained from real estate transactions covered by the Rule necessarily will go into a bank account.” ALTA states. “Those accounts will be held, of course, by the transferee entities covered by the Rule, and therefore will be subject to the CDD Rule.” 

ALTA concludes by telling the court that it should grant the plaintiffs’ motion for summary judgment, which was filed in late August, due to the fact that “FinCEN arbitrarily and capriciously estimated the Rule’s compliance costs and supposed benefits, all of which will impact ALTA’s membership.”