The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued two rules designed to safeguard the residential real estate and investment adviser sectors from money laundering.
The final residential real estate rule will require certain industry professionals to inform FinCEN about non-financed transfers of residential real estate to a legal entity or trust, which the agency considers to be a “high illicit finance risk.” FinCEN stated the new rule will increase transparency while limiting the ability to launder illicit proceeds through the US housing market.
The final investment adviser rule will apply anti-money laundering/countering the financing of terrorism (AML/CFT) requirements—including AML/CFT compliance programs and suspicious activity reporting obligations—to certain investment advisers that are registered with the Securities and Exchange Commission (SEC), as well as those that report to the SEC as exempt reporting advisers. The rule will help address the uneven application of AML/CFT requirements across this industry.
The residential real estate rule is scheduled to begin in December 2025 and the investment adviser rule is slated to go into effect in January 2026.
“The Treasury Department has been hard at work to disrupt attempts to use the United States to hide and launder ill-gotten gains,” said Treasury Secretary Janet L. Yellen. “That includes by addressing our biggest regulatory deficiencies, including through these two new rules that close critical loopholes in the U.S. financial system that bad actors use to facilitate serious crimes like corruption, narcotrafficking, and fraud. These steps will make it harder for criminals to exploit our strong residential real estate and investment adviser sectors.”
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