Texas title company sues Treasury over real estate surveillance rule

Tyler, TX; April 14, 2025: The East Texas Title Company filed a lawsuit against the Financial Crimes Enforcement Network (FinCEN), seeking to block a new rule requiring intrusive data collection and reporting for cash real estate purchases.  

“Congress cannot shirk its lawmaking responsibilities by granting federal agencies a blank check to write laws,” said Luke Wake, an attorney at Pacific Legal Foundation. “FinCEN is now mandating unreasonable collection and reporting of personal information to the federal government; the agency claims a sweeping power to require reporting on conceivably any consumer transaction simply because systematic reporting might prove useful to the government.”

In 2024, FinCEN, operating under the supervision of the U.S. Secretary of Treasury, finalized a rule that will force title companies to collect and report detailed information about non-financed real estate transactions, including personal information from everyone involved in the sale, and information about how the payments were made. Breaking the rules — even accidentally — could lead to large fines and even criminal charges. The rule is set to go into effect in December 2025.   

In 1993, Celia Flowers bought the first of many title companies that she now owns. She and her daughter, Erica Hallmark, own and manage the East Texas Title Companies, based in Tyler, Texas. The company facilitates or gathers information for thousands of real estate closings each year and is licensed in more than 80 counties across Texas, where there’s been a surge in “cash purchases,” any transaction in which the buyer does not require a bank loan.

Compliance with the new rule will be costly and time-consuming for East Texas Title. And under this new rule, they still risk severe penalties for an inadvertent mistake. But Flowers’ objections to the rule extend beyond just the cost and risk. She thinks the rule violates the Constitution’s separation of powers and doesn’t think her company should be forced to perform government surveillance on their clients by reporting private information from legitimate transactions.  

The case is East Texas Title Co. v. Bessent, filed in U.S. District Court for the Eastern District of Texas, and asks the court to strike down this rule and return the power to make laws back to Congress.