The title insurance industry is keeping a watchful eye on the recent legal and regulatory chaos around the beneficial ownership information (BOI) reporting requirement, as agents prepare for the Dec. 1, 2025, deadline to implement FinCEN’s new expanded requirement to report information about all-cash residential transactions involving legal entities and trusts nationwide.

Here are how the two requirements are related and why the title insurance industry is keeping such a close eye on events.

The 411 on the BOI

The Corporate Transparency Act (CTA) was enacted in 2021 in an effort to enhance transparency of financial dealings in the U.S. to stem the tide of both domestic and foreign entities who were using the financial system as well as the real estate markets to hide illegally acquired funds.

The BOI reporting requirement called for companies – domestic and foreign – to identify and register the beneficial ownership information behind these entities, making that information accessible to financial services companies who were doing business with them.

Under Siege

The BOI reporting requirements became effective Jan. 1, 2024, and Jan. 1, 2025, was set as the deadline for reporting.

A series of court cases challenging the constitutionality of the CTA itself, as well as the regulations, delayed the implementation of BOI, as the courts reviewed the arguments presented.

• In December, an injunction issued by a Texas judge stopped the BOI from going into effect.
• In late December, the Fifth Circuit Court of Appeals issued a stay of the injunction, allowing BOI reporting to be enforced, but subsequently vacated the stay.
• In February, a federal district court lifted the last remaining nationwide injunction, and FinCEN announced a new reporting deadline of March 21, 2025.
• Failing to quash the regulation via the courts, at the behest of the current administration, FinCEN issued an interim final rule on March 25 that removed the reporting obligation from U.S. companies, retaining only a reporting obligation for foreign companies

Anti-money Laundering Efforts

The intent of both the BOI reporting requirement and FinCEN’s requirement that title agents report information about all-cash residential transactions involving legal entities and trusts is to strengthen the Department of Treasury’s ability to combat money laundering in the U.S.

It is unclear if the gutting of BOI will eventually lead to changes to the FinCEN reporting requirement that is to begin Dec. 1, but the American Land Title Association (ALTA) has announced they are working closely with regulators as the industry moves toward the December deadline.

In the meantime, ALTA has noted that the Department of Treasury could face legal challenges over the BOI reporting changes, since the regulation as written may not comport with the intent of the law.

“Generally, it’s viewed as an abuse of power when an agency issues a rule that is inconsistent with its authorizing act,” ALTA noted in a recent release.  “While courts have held that regulators can impose additional or more specific requirements, they may not generally add to, detract from or modify the statute.”

Given the uncertainty in the current chaotic regulatory environment, title agents are encouraged to stay attuned to any information that comes to them through ALTA or their underwriters concerning the FinCEN regulations.

At FAN, we maintain the highest standards in providing title, escrow and closing services throughout Florida, and in addition, we are dedicated to protecting the integrity of the real estate transactions we manage. Contact us today to learn how we can help you with your next transaction.