A Measured Step Towards Compliance
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced on September 30, 2025, that it will postpone implementation of its new Residential Real Estate Transfers Rule — part of broader anti–money-laundering (AML) regulations — until March 1, 2026.
FinCEN stated that the delay is intended to “reduce business burden and ensure effective regulation” while maintaining strong oversight to protect the U.S. financial system from money laundering, terrorist financing, and other illicit threats. The extension provides the real estate and escrow industries additional time to align their compliance processes with the forthcoming federal reporting requirements.
During this extension period, existing Geographic Targeting Orders (GTOs) will remain in effect. These orders continue to require certain disclosures for high-value, all-cash transactions in select U.S. markets, including parts of California.
You can read the official release and temporary exemptive order here:
Real Estate Report Form (FinCEN.gov)
Exemptive Relief Order (FinCEN.gov)
Understanding the Rule
The Residential Real Estate Transfers Rule (RRE Rule) is part of FinCEN’s effort to close gaps in anti–money-laundering oversight within the real estate sector. Under the new regulation, title companies, escrow holders, and other “reporting persons” would be required to collect and report identifying information for certain non-financed residential real estate transactions — primarily all-cash purchases.
The goal: to prevent illicit funds from being funneled through property purchases that might otherwise go unmonitored.
While most professionals in the industry support the intent of stronger financial transparency, implementation requires clarity and cooperation across state lines — particularly in markets like California, where escrow is structured differently than in many other states.
Cypress Escrow’s Perspective
“Independent escrow companies have always operated as trusted, neutral third parties in California real estate transactions,” said Chris Marquez, President of Cypress Escrow. “This new FinCEN rule reinforces our central role in maintaining transparency — but it also underscores the need for federal agencies to recognize the unique structure and licensing of California’s independent escrow industry.”
California’s escrow model is distinct: unlike in many states where title companies handle escrow functions, California allows independently licensed escrow companies regulated by the Department of Financial Protection and Innovation (DFPI). These firms already operate under strict trust accounting, auditing, and reporting standards designed to prevent the very risks the federal rule aims to address.
“As regulators refine the rule, it’s important they understand how California’s independent escrow companies already meet many of these objectives. Smart regulation should enhance compliance without duplicating safeguards that already work.”
FinCEN’s postponement gives the real estate industry more time to align compliance systems. For California’s independent escrow companies, it’s an opportunity to ensure that new federal rules recognize existing state-level safeguards and the essential role escrow plays in protecting every transaction.
What This Means for Agents and Brokers
For real estate professionals, the postponement offers breathing room — but not a reason to disengage. FinCEN’s delay gives the industry until March 2026 to prepare for expanded reporting and to clarify which transactions will fall under the new requirements.
Agents and brokers should:
- Stay informed about AML and FinCEN updates leading into 2026.
- Partner with escrow companies that maintain rigorous compliance and secure transaction systems.
- Communicate proactively with clients about the importance of transparency in all-cash deals.
Escrow professionals will continue to play a critical role as the neutral backbone of real estate transactions, ensuring both compliance and client confidence.
Our Commitment to Transparency and Security
As a licensed, independent escrow company, Cypress Escrow already adheres to state-level standards that align closely with federal transparency goals. Our team will continue to monitor FinCEN developments and collaborate with industry peers to support practical, consumer-focused compliance.
Through secure escrow services, dual-control wire verification, and encrypted document management, Cypress Escrow provides clients and partners peace of mind — today and under any future federal framework..
Next Steps
Stay informed and prepared with a partner that understands both regulation and real-world transactions.
Contact us to learn more about our secure escrow services.