Bulletin: SLS2023013

Dear Associates:

This bulletin is continuing guidance on the FinCEN Geographic Targeting Orders (GTO) which were issued to all underwriters. A New GTO has been issued further expanding the geographic regions subject to reporting requirements and extends the effective date of the reporting requirements of the existing geographic regions. As a reminder, the GTO has defined a covered business to include Stewart Title Insurance Company, Stewart Title Guaranty Company (the Stewart family), its employees and its authorized Title Agents. The amended GTO has expanded and defined a covered transaction as any transaction that will close involving purchases of properties within the Texas County of Travis, the Florida Counties of Hillsborough, Pasco, Pinellas, Manatee, Sarasota, Charlotte, Lee or Collier and the Massachusetts Counties of Bristol, Essex, Norfolk, or Plymouth effective beginning November 21, 2023, and ending on April 18, 2024 (except as otherwise provided in Section III. C of the Geographic Targeting Order). The terms of this Order for purchases in all other counties covered by this Order are effective beginning October 22, 2023, and ending on April 18, 2024, involving:

1. Residential real property located in  

a.  The New York Counties/Boroughs of Manhattan, Bronx, Brooklyn, Queens, or Staten Island; 
b.  The Texas Counties of Bexar, Tarrant, Dallas, Harris, Montgomery, Webb, or Travis;
c.  The Florida Counties of Miami-Dade, Broward, Palm Beach, Hillsborough, Pasco, Pinellas, Manatee, Sarasota, Charlotte, Lee, or Collier;
d.  The California Counties of San Diego, Los Angeles, San Francisco, San Mateo, or Santa Clara;
e.  The Nevada County of Clark;
f.   The Washington County of King;
g.  The Massachusetts Counties of Suffolk, Middlesex, Bristol, Essex, Norfolk, or Plymouth;
h.  The Illinois County of Cook;
i.   City or County of Baltimore, Maryland with a purchase price of $50,000 or more;
j.   The Hawaii Counties of Hawaii, Maui, Kauai, or Honolulu, or the City of Honolulu;
k.  The Maryland Counties of Montgomery, Anne Arundel, Prince George's, or Howard;
l.   The Virginia Counties of Arlington or Fairfax, or the Cities of Alexandria, Falls Church, or Fairfax;
m. The Connecticut Counties of Fairfield or Litchfield;
n.  The Colorado Counties of Adams, Arapahoe, Clear Creek, Denver, Douglas, Eagle, Elbert, El Paso, Fremont, Jefferson, Mesa, Pitkin, Pueblo, or Summit; or
o.  The District of Columbia.

2. The proposed insured/buyer is a Legal Entity, defined as a corporation, limited liability company, partnership or other similar business entity whether formed under the laws of a state, or of the United States, or a foreign jurisdiction, OTHER THAN a business whose common stock or analogous equity interests are listed on a securities exchange regulated by the Securities Exchange Commission ("SEC") or a self-regulatory organization registered with the SEC, or an entity solely owned by such a business, and

3. The purchase price of the residential real property is in the amount of $300,000 or more and in the amount of $50,000.00 for residential real property located in the City or County of Baltimore, Maryland, and

4. Such purchase is made without a bank loan or other similar form of external financing (financing from a private lender, seller or other business is considered a reportable transaction.), and

5. Such purchase is made, at least in part, using currency or a cashier's check, a certified check, a traveler's check, a personal check, a business check, a money order in any form, a funds transfer, or virtual currency. (An attorney trust or escrow check is considered a business check for reporting purposes). There is no de minimus amount below which the reporting is not triggered.

In the event a transaction meets the above criteria, (remember, the transaction must meet the current prong test (covered location, improved residential property, over $300,000.00 or $50,000.00 in the City or County of Baltimore, Maryland, without institutional financing and in cash or an above-mentioned cash equivalent) then the covered transaction shall be reported to FinCEN by filing the Currency Transaction Report ("CTR") within thirty (30) days of the closing.

Under the current order, entities which are listed on a securities exchange regulated by the Securities Exchange Commission ("SEC"), or a self-regulatory organization registered with the SEC, or an entity solely owned by such a business have been excluded from the definition of "Legal Entity" and are now exempt from being reported.

Here is a link to search the SEC registry: https://www.sec.gov/edgar/searchedgar/companysearch.html

A "Beneficial Owner" is defined in the order as each individual who, directly or indirectly, owns 25% or more of the equity interests of the Legal Entity purchasing real property in the Covered Transaction. This information should be reported in Part I of the CTR. Please follow the instructions in the GTO for recording the information appropriately.

The CTR can be found at https://bsaefiling.fincen.treas.gov/docs/GTO/RealEstate_GTO_Template.pdf
(The CTR works best using Internet Explorer) Refer to the GTO itself for instructions on completing the CTR.

The GTO can be found at the following link: GTO

Important Change in the New GTO: Please also make sure to include the term "REGTO1023" in Field 45 of Part IV of the CTR.

FinCEN has also advised Stewart further that, "To the extent that your business may not be collecting and reporting social security numbers where available and as requested in the form, FinCEN expects that Covered Businesses will collect and report such information in Part I of the Currency Transaction Report." If you have not previously been reporting social security numbers in Part I of the Currency Transaction Report, please make sure that you are reporting them on all new filings.

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.

Proof of filing must be submitted to Stewart by email at FINCENreports@stewart.com. Please include a copy of the receipt showing filing as well as the ALTA data collection document.

All offices and agents must (1) retain all records relating to compliance with the Order for a period of five years from the last day that this Order is effective (including any renewals of the Order), (2) store such records in a manner accessible within a reasonable period of time, and (3) make sure such records are available to FinCEN, or any other appropriate law enforcement or regulatory agency, upon request. Stewart, as part of our normal auditing process, will audit your compliance with this GTO, and subsequent GTO's as modified or amended. We encourage the use of the ALTA forms to certify that the transaction is reportable and the ALTA forms to collect the information to assist in the reporting and compliance with this GTO. ALTA forms are being updated and will be sent once available.

Failure to report can subject the company or any of its employees to civil and criminal penalties.

Stewart suggests the following:

We encourage you to review prior FinCEN GTO bulletins and orders since many of the requirements are the same. Provide your clearance and legal staff with the criteria on the reportable transactions as well as a script for discussing the requirements with clients/customers based upon the below exception language. Utilize the ALTA forms to collect the information.

EXCEPTION/REQUIREMENT:

Include the following exception/requirement in every title report or commitment for a transaction involving property located in the areas listed above:

This Company is required by Federal Law to collect certain additional information from you and the parties representing you regarding the purchase of real property. US Code Title 31-Sec 5326 authorizes the U.S Department of Treasury to collect information about the certain transaction as specified in various geographic targeting orders for the purpose of preventing evasion of the Bank Secrecy Act. As a result of a Geographic Targeting Order ("GTO") issued by the United States Department of Treasury, Financial Crimes Enforcement Network ("FinCEN"), this transaction may be responsive to the requirements of the GTO. You may be required, as a condition of the issuance of the policy to provide additional information that will be reported to FinCEN. Please contact this company and provide the details of this transaction in order to comply with the GTO.

If the transaction meets the reporting requirement, you will be asked to provide information on the identity of the parties to the transaction, which will be reported to FinCEN. This company is prohibited from issuing its policy if the transaction is reportable and the information is not provided for reporting. Additional exceptions and/or requirements may be raised.

If you are in need of assistance or have questions regarding the order, please reach out to your manager, agency representative, Stewart's Legal Department or by email to FINCENreports@stewart.com.

If you have questions about a transaction involving a closed bank or a bridge bank, or other issues not addressed by this bulletin, please contact a Stewart Title Guaranty Company underwriter.

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