The Biden administration wants to make residential real estate transactions more transparent by unmasking the owners of certain all-cash purchases. It’s part of an ongoing effort to combat money laundering and the movement of dirty money through the American financial system.
The Treasury Department’s Financial Crimes Enforcement Network proposed a regulation on Wednesday that would require real estate professionals to report information to the agency about non-financed sales of residential real estate to legal entities, trusts and shell companies.
All-cash purchases of residential real estate are considered at high risk for money laundering. The rule would not require the reporting of sales to individuals.
“Illicit actors are exploiting the U.S. residential real estate market to launder and hide the proceeds of serious crimes with anonymity, while law-abiding Americans bear the cost of inflated housing prices,” FinCEN Director Andrea Gacki said in a statement.
She said the proposal is an “important step toward not only curbing abuse of the U.S. residential real estate sector, but safeguarding our economic and national security.”
The White House in December 2021 laid out plans to launch real estate recordkeeping requirements to increase transparency in real estate transactions, “diminishing the ability of corrupt actors to launder ill-gotten proceeds through real estate purchases.”
Real estate is a commonly used vehicle for money laundering, due to opaque reporting rules on purchases. The degree to which criminal activity affects housing affordability is being studied.
One study on the impact of money laundering on home values in Canada, conducted by a group of Canadian academics, found that money laundering investment in real estate pushed up housing prices in the range of 3.7% to 7.5%.
Ian Gary, executive director of the transparency advocacy group FACT Coalition said the proposed regulation “sends a clear message that the U.S. plans to close off options for criminals looking to hide their ill-gotten gains in our real estate markets.”
Treasury Secretary Janet Yellen testifies before a House Financial Services Committee hearing on ‘the annual report of the Financial Stability Oversight Council’ on Capitol Hill, Tuesday, Feb. 6, 2024, in Washington. (AP Photo/Manuel Balce Ceneta)
WASHINGTON (AP) — The Biden administration wants to make residential real estate transactions more transparent by unmasking the owners of certain all-cash purchases. It’s part of an ongoing effort to combat money laundering and the movement of dirty money through the American financial system.
The Treasury Department’s Financial Crimes Enforcement Network proposed a regulation on Wednesday that would require real estate professionals to report information to the agency about non-financed sales of residential real estate to legal entities, trusts and shell companies.
All-cash purchases of residential real estate are considered at high risk for money laundering. The rule would not require the reporting of sales to individuals.
“Illicit actors are exploiting the U.S. residential real estate market to launder and hide the proceeds of serious crimes with anonymity, while law-abiding Americans bear the cost of inflated housing prices,” FinCEN Director Andrea Gacki said in a statement.
She said the proposal is an “important step toward not only curbing abuse of the U.S. residential real estate sector, but safeguarding our economic and national security.”
The White House in December 2021 laid out plans to launch real estate recordkeeping requirements to increase transparency in real estate transactions, “diminishing the ability of corrupt actors to launder ill-gotten proceeds through real estate purchases.”
Real estate is a commonly used vehicle for money laundering, due to opaque reporting rules on purchases. The degree to which criminal activity affects housing affordability is being studied.
One study on the impact of money laundering on home values in Canada, conducted by a group of Canadian academics, found that money laundering investment in real estate pushed up housing prices in the range of 3.7% to 7.5%.
Ian Gary, executive director of the transparency advocacy group FACT Coalition said the proposed regulation “sends a clear message that the U.S. plans to close off options for criminals looking to hide their ill-gotten gains in our real estate markets.”
Treasury has also been responsible for carrying out other transparency-related initiatives, including the rollout of a new database on small business ownership. The so-called beneficial ownership registry is expected to contain personal information on the owners of at least 32 million U.S. businesses.
Treasury Secretary Janet Yellen said last month that 100,000 businesses have registered for the new database.
The National Small Business Association filed a lawsuit in November 2022 to stop the U.S. database from being created, arguing that it is unduly burdensome on small firms and infringes on states’ rights to regulate businesses.
The SEC argues that Coinbase’s request is overly broad, seeking nearly all documents related to crypto assets. In its court filing, the SEC stated that it has already provided Coinbase with various
A green trade row is spilling into the COP talks in Dubai, and Brazil has China’s support. Brazil has taken its green trade row with the European Union to this year’s global climate summit. The
In a recent development that has caught the attention of Wall Street and Main Street alike, the Senate has taken significant steps on a controversial tax bill. This legislation, if passed, could dramatically
BCG’s report on Africa Climate Finance reveals that only 12% of the $2.4 trillion investment needed by 2030 has been met. Only 12% of the $2.4 trillion investment needed by 2030 for climate financing