Bulletin: NY000585

Date:
July 28, 2016
To:
All New York State Agents
RE:
US Department of Treasury: Financial Crimes Enforcement Network (FinCEN) Geographic Targeting Order, Manhattan, Brooklyn, Bronx, Queens and Staten Island NY

On January 13, 2016 the FinCEN issued a Geographic Targeting Order (GTO) on several title underwriters, including the Stewart Family of Underwriters. The GTO original would expire on August 27, 2016, however FinCEN has been continued the GTO until February 23, 2017.  In addition to the requirements in the initial GTO, the amended GTO extends the reporting period and expands the scope of the reporting requirements.  The initial GTO covers property in Manhattan (New York) as well as Miami Dade (Florida).  The continued GTO, in addition to Manhattan and Miami Dade, covers residential property in Bexar County Texas, Broward and Palm Beach Counties Florida, Brooklyn, Bronx, Queens and Richmond (Staten Island) counties, New York, and the counties of San Diego, Los Angles, San Francisco, San Mateo and Santa Clara in California

I would refer you to our previous bulletins on this matter for reference.  This Amended GTO places reporting requirements on all Title Insurance Underwriters and their Agents operating in New York State and other jurisdictions to report on covered transactions that take place in New York, Bronx, Brooklyn, Queens and Richmond (Staten Island) Counties.  Please read below for the changes to the reporting requirements.  

The GTO has defined Stewart Title Insurance Company, it employees and its authorized title agents as a covered business.  The GTO defines a covered transaction as any transaction that will close from August 27, 2016 to February 23, 2017 involving:

1.    Residential real property located in the Boroughs of Manhattan, Bronx, Brooklyn Queens and Staten In the City of New York,  N.Y., (NOTE CHANGE IN COUNTIES)

2.    The proposed insured/ buyer: is a Legal Entity, defined under the GTO as a corporation, limited liability company, partnership or other similar business entity whether formed under the laws of New York, any other state, the  United States or a foreign jurisdiction;

3.    Consideration of more than $3,000,000 in Manhattan and $1,500,000.00 in Brooklyn, Bronx, Queens and Staten Island.  (NOTE CHANGE IN AMOUNT)

4.    Without a loan or similar form of external financing from a financial institution; the reporting exclusion is only triggered by loans financed by a financial institution.  If financing is provided by a private lender, seller or other business the transaction is reportable.

5.    Any portion of the purchase price is paid using currency, cashier’s check, certified check, traveler’s check or money order, personal check or business check. There is no de minimus amount below which the reporting is not triggered.  NOTE: a personal or business check NOW triggers the reporting requirement. Payment of only the settlement services by any of the listed methods does not trigger the reporting requirement.

In the event a transaction meets the above criteria, the following must be reported within thirty (30) days of the closing to the FinCEN on a form IRS/FinCEN 8300:  The information is the same as the initial reporting requirements:

1.    Identity of the individual primarily responsible for representing the Legal Entity;

a.    A description of the identification (driver’s license, passport or other similar identifying document) responsible for representing the Purchaser with a copy retained in the file;

2.    Identity of the Purchaser and any Beneficial Owner(s) of the Purchaser’s;

a.    A description of the type of identification, driver’s license, passport or other similar identifying document, obtained from the Beneficial Owner with a copy retained in the file;

b.    Any person or entity owning 25% or more of the purchasing entity is a “beneficial owner” and must be reported. If an entity is a member of the purchasing entity, members of that entity must be reported.

3.    Date of closing of the Covered Transaction;

4.    Total amount transferred in the form of a Monetary Instrument;

5.    Total purchase price of the Covered Transaction; and

6.    Address of the real property involved in the Covered Transaction;

7.    Also include the term “REGTO” as a unique identifier for this GTO in the Comments section. (NOTE CHANGE)

Failure to report can subject the company or any of its employees to a fine and/or penalty. Penalties can be assessed any time within six years from the date of the Covered Transaction. Civil actions may be commenced within two years of the date of the penalty or criminal conviction.

In the event a party will not provide the information on a covered transaction, you may not issue the title insurance policy without written authority from Stewart. 

Record retention remains the same as in the original GTO. All records relating to compliance with this Order must be retained for a period of five (5) years from the last day that this order is effective (including any renewals of this Order).

Stewart is continuing to work with FinCEN directly as well as through ALTA and NYSLTA to provide information to its offices and agents. Attached to this bulletin is the amended GTO. FinCEN and ALTA will be providing further guidance and educational information, through telephone calls.

Stewart will require all offices and Agents to file the form 8300 within thirty (30) days on all covered transactions for as long as the order is in place directly with FinCEN.  All Agents and office should report evidence of the filing to Stewart via the over limits/high liability system.  A copy of the form 8300 completed and signed together with the required beneficial owner identification and copies of the proofs taken should be attached to an over limits form and submitted to:  HighLiPolicy@stewart.com.  You will not receive an approval of the submission.  This submission is for record keeping purposes. 

In the event you have any questions, please the Stewart Title Insurance Company- New York Legal Department. 

Forms: IRS/FinCEN 8300; Cert Fill-In; Cert Print and Write

Attachments: Updated Geographic Targeting Order

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.