Court strikes down federal real estate surveillance rule

Tyler, Texas; March 19, 2026: A federal court today struck down a rule that forced title companies to collect and report private details about the people involved in non-financed real estate transactions in residential property, particularly those involving business entities or trusts. Flowers Title Companies, a family-owned title business in Tyler, Texas, won a ruling from the U.S. District Court for the Eastern District of Texas vacating the Financial Crimes Enforcement Network’s real estate reporting rule as exceeding the agency’s statutory authority under the Bank Secrecy Act.

“FinCEN claimed sweeping power to require reporting anytime someone pays cash for a house,” said Luke Wake, an attorney with Pacific Legal Foundation. “But Congress limited FinCEN to regulating only objectively ‘suspicious’ transactions; that was not a license for the agency to require reports simply because the government might find the data useful.”

Celia Flowers built her title company from the ground up, starting as a high school student with a dream of owning a business. Today, she and her daughter, Erica Hallmark, operate a company licensed in more than 80 Texas counties. When FinCEN finalized its rule in 2024, they faced costly new compliance obligations—and severe penalties if they should make any reporting mistake on their clients’ legitimate transactions.

The court agreed with PLF on every statutory argument, finding that cash real estate transfers to entities and trusts are not categorically “suspicious” under the Bank Secrecy Act. Critically, the ruling vacates the rule nationwide, delivering relief not just to Flowers Title but to all affected businesses.

Pacific Legal Foundation represents Flowers Title Companies free of charge. The case is Flowers Title Companies, LLC v. Bessent.