Two rules were handed down by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) to safeguard residential real estate investors from illicit finance. Both rules deliver on key lines of effort outlined in the Biden-Harris administration’s U.S. Strategy on Countering Corruption.
The mandates are the most significant changes to the U.S.’s anti-money-laundering framework in decades and “will make it harder for criminals to exploit our strong residential real estate and investment adviser sectors,” Treasury Secretary Janet Yellen said Wednesday (Aug. 28).
“The Treasury Department has been hard at work to disrupt attempts to use the United States to hide and launder ill-gotten gains,” Yellen added.
Under the new rules, some professionals will be required to report information to FinCEN about non-financed transfers of residential real estate to a legal entity or trust. This increased transparency aims to limit money laundering through the housing market and assist law enforcement in launching thorough investigations.
The new regulation close long-standing loopholes used by financial criminals to launder money through U.S. residential real estate and private investment markets.
A corporate ownership database to crack down on the use of anonymous shell companies is also in the works as part of legislation passed in 2021.
TD Bank Group said on Wednesday that civil and criminal investigations by U.S. regulators into its anti-money laundering (AML) program will be wrapped up by the end of this year. Canada’s second-largest lender put aside $3 billion to cover fines.
“We recognize the seriousness of our U.S. AML program deficiencies and the work required to meet our obligations and responsibilities is of paramount importance to me, our senior leaders, and our Boards,” said Bharat Masrani, Group President and Chief Executive Officer, TD Bank Group.
“Our remediation program is well underway. TD has strengthened its U.S. AML program with the addition of globally recognized leaders and talent from across the industry, including experts from regulatory agencies, law enforcement and government. The Bank is also making important investments in data and technology, training, and process design. We are building stronger foundations for our U.S. business, where 30,000 colleagues proudly serve more than 10 million Americans from Maine to Florida,” added Masrani.
