Attorney General Mayes Supports New Rules Targeting Money Laundering

PHOENIX - Attorney General today joined a coalition of 25 states and territories in filing a letter with the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) in support of proposed rules entitled "Anti-Money Laundering Regulations for Residential Real Estate Transactions."

In a letter sent yesterday, the attorneys general expressed staunch support for the proposed regulations, which will reduce criminals' ability to launder money through residential real estate transactions. Specifically, the proposal requires "certain persons involved in real estate closing and settlements to submit reports and keep records on identified non-financed transfers of residential real property to specified legal entities and trusts on a nationwide basis."

"These proposed regulations will help deter wrongdoing by criminals as well as provide law enforcement important tools for investigations," said Attorney General Mayes. "I urge the U.S. Treasury to implement these rules as quickly as possible."

The proposed regulations will:

• Require businesses - including attorneys - performing closing or settlement functions, for a non-financed sale or transfer of residential property to any entity or trust, to collect and report information to FinCEN.
• Permit federal, state, and local law enforcement to access more information about suspicious real estate transactions more efficiently from a single source.
• Aid law enforcement in identifying suspicious real estate transactions on a national basis that may otherwise remain undetected.

The letter also explains that the proposed rule is not overly burdensome in its reporting requirements.

"This regulatory scheme strikes an appropriate middle ground and will not be unduly burdensome on the reporting parties," the letter states. "The Real Estate Reports impose a streamlined reporting requirement that is less onerous than financial institutions' obligations to file Suspicious Activity Reports. FinCEN will also continue to exempt persons involved in real estate closings and settlements from the Bank Security Act's requirement to establish anti-money laundering programs. Moreover, certain transfers, including purchases of real estate by natural persons, will not be subject to the reporting requirements."

The letter was led by Oklahoma, Delaware, New Hampshire, and Rhode Island. In addition to Arizona, also signing on to the letter were the attorneys general of Alaska, California, Colorado, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, Pennsylvania, South Dakota, Tennessee, Vermont, and the U.S. Virgin Islands.