We have spoken in the recent past about the Financial Crimes Enforcement Network’s (FinCEN) geographic targeting order (GTO). This order requires title companies to gather and disclose certain information pertaining to the identity of the natural person(s) who make up a Limited Liability Corporation (LLC) if they are purchasing a home without a mortgage (all cash) over a certain amount of money, in certain cities of the United States, to safe guard against money laundering.
The GTO was originally issued in August 2016, applying to real estate purchased ranging from $500,000.00 to $3,000,000.00 (depending on which city the property is located) in New York City, Miami, Broward, Palm Beach, Los Angeles, San Francisco, San Diego and San Antonio. It was then updated in September 2017 to add an additional city, Honolulu, and add wire transfers as well. Up until now, the guidelines of this order have been very clear. It specifies the cities within the United States it pertains to, the purchase price threshold that must be met to be covered under the order and the specific information the title co. must disclose.
However, as of May 21, 2018, a new GTO took effect with a new set of rules which title companies must follow. The title companies have been instructed by FinCEN to remain silent as to the new rules as they are confidential and are not to be disclosed. Going forward, the title companies will request certain new information in accordance with the new order and will possibly be subject to civil or criminal repercussions for failure to do so.
Although the new rules are confidential, one media organization has reported that the rules now apply to most real estate transactions in New York.