FinCEN Director Calvery: All Cash Real Estate Purchases are an AML Gap to Address

FinCEN

On April 12, FinCEN Director Calvery delivered remarks at the ACAMS AML and Financial Crimes conference. Calvery addressed the vulnerabilities of the real estate market to money laundering. Although FinCEN has addressed a number of vulnerabilities in the mortgage lending industry by imposing AML program requirements on non-bank residential mortgage lenders and originators, Calvery noted that “all cash sales” — that is, properties purchased without a mortgage— are a “gap we must address.” The recent Geographical Targeting Orders (GTO) issued to certain U.S. title insurance companies targeting high-end, all cash real estate sales in New York and Miami are intended to assist FinCEN in gathering information to address this gap. Calvery also noted that FinCEN will continue to engage with its regulatory, law enforcement, and real estate industry partners to determine (i) where the most significant risks lie; (ii) whether additional AML requirements are needed; and (iii) the best approach for mitigating “identified vulnerabilities while balancing the benefits of information gathering tools like the GTOs with potential burden imposed on the industry.”