New US rule targeting real estate money laundering reaches White House review

Reuters
·1 min read
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FILE PHOTO: The White House is seen during U.S. President Joe Biden's second week in office, in Washington

NEW YORK (Reuters) - A long-awaited U.S. rule aimed at curbing money laundering in real estate has reached a key White House office for review, the final hurdle for it to clear before it can be formally proposed next year.

The rule, put forth by the Treasury Department's Financial Crimes Enforcement Network (FinCEN), reached the Office of Information and Regulatory Affairs on Monday, government records show. After a review by the office, the rule would open up for a two-month public comment period in February 2024, the records show.

THE TAKE

The rule is expected to require real estate professionals to report the identities of the beneficial owners of companies buying real estate in cash, ending a loophole that anti-corruption advocates say has allowed criminals to anonymously stash ill-gotten gains in U.S. property.

THE CONTEXT

The Treasury Department said earlier this month that FinCEN would propose the rule in early 2024.

While banks have long been required to understand the source of customer funds and report suspicious transactions, no such rules exist nationwide for the real estate industry.

FinCEN has since 2016 operated real estate purchase disclosure rules in a handful of cities including New York and Miami, but experts have said they are easy to skirt.

(Reporting by Luc Cohen and Chris Prentice in New York; Editing by Paul Simao)