A court finally tells FinCEN there is nothing questionable about buying in cash
When a federal court struck down FinCEN’s real estate surveillance rule, Celia Flowers finally got an answer to the question that had been haunting her business for two years: Could the government force her to hand over her clients’ private information?
In 2024, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) finalized a rule requiring title companies to collect and report detailed information about non-financed real estate transactions in residential property, particularly those involving business entities or trusts. For Celia, this meant hiring legal counsel and staff to comply with all the new paperwork, and risking severe penalties should anyone make a mistake. More troubling, it forced her to perform government surveillance on her clients—families she had been serving with honesty and expertise since she bought the company in 1993.
On March 19, 2026, the U.S. District Court for the Eastern District of Texas agreed that FinCEN had overstepped its statutory authority. The court vacated the rule nationwide, delivering relief not just to Celia but to other companies facing the same compliance burden.
The history of FinCEN
To understand FinCEN’s logic, we have to go back to the Bank Secrecy Act, a 1970 law that requires any “financial institution”—which could include any business FinCEN chooses—to report “suspicious transactions” to the federal government. The stated goal was to help law enforcement track money laundering.
FinCEN, the sub-agency within the Department of Treasury tasked with administering that authority, has been expanding its reach ever since.
Its latest attempt was the real estate rule, which required reports on non-financed residential real estate transfers. With that rule, FinCEN deemed commonplace residential transfers “suspicious” because sometimes bad actors launder money through real estate. But as the court found in Celia’s case, FinCEN “fails to explain or show how non-financed residential real estate transactions are categorically ‘suspicious.’”
Indeed, there are plenty of perfectly lawful reasons to buy real estate with cash: avoiding lending costs, minimizing interest payments, moving quickly in a competitive market. By lumping them in with money laundering and crime under the nebulous and unsubstantiated label of “suspicious activity,” FinCEN turned businesses like Celia’s into government surveillance agents—and all the Americans who patronize them into surveillance targets.
The pattern behind the rule
This type of “surveillance creep”—gradual, unchecked expansion of government surveillance—is not unique to the real estate industry. If the government is able to identify a problem—money laundering, drug trafficking, cartel activity—it can justify almost any surveillance expansion by pointing to a handful of bad actors that it’s supposedly chasing.
For example, FinCEN recently issued geographic targeting orders requiring businesses in select counties along the southern border to report every cash transaction over $200, on the theory that cartels were using those transactions to launder money.
The problem with this method, aside from its flagrant constitutional violations, is that it didn’t work. The cartels quickly adapted, moving their activity to other areas; however, the local businesses that remained suffered steep compliance costs and invasions of privacy. FinCEN’s response was to follow the criminals by expanding the reporting requirement to more counties.
Surveillance perimeters grew, criminals adapted, and regular people got left shouldering the compliance burden. Meanwhile, agencies like FinCEN claim a blank check to erode Fourth Amendment rights in the name of public safety.
What the ruling means
With the district court’s ruling, businesses like Celia’s are now spared from the unappealing task of reporting private customer information to the federal government. They’re also free from a crushing compliance burden, which cost the industry as a whole more than half a billion dollars in its first year alone.
Importantly, the court’s opinion rejects the notion that FinCEN can stretch its already broad authority to require reporting on any class of transactions the government wants information about. The court stressed that FinCEN has authority to require reporting only on truly “suspicious” transactions, and that the agency cannot deem transactions suspicious because some bad actors exist.
But equally important is what the court did not decide. Because the rule exceeded FinCEN’s statutory authority, the judge did not need to reach the constitutional questions the case raised—including whether forcing private businesses to collect and report Americans’ personal financial information violates the Fourth Amendment’s protection against unreasonable searches.
For now, though, Celia can get back to business as usual: helping Texas families close on their homes without Washington looking over her shoulder. Pacific Legal Foundation will continue fighting for Fourth Amendment protections until every American can enjoy the same freedom.
