The rule they could kill died, and the one they can't kept running

Sure.

Everybody popped champagne last month. A federal judge in East Texas struck down the rule. Dead. Vacated. The title companies won. The LLCs won. The all-cash buyers won.

I went and checked the basement. The pipe still leaks.

Here is what died. FinCEN published a rule in August 2024. It said every all-cash purchase of a house, duplex, triplex, or fourplex by an LLC or trust must be reported. No dollar floor. A $90,000 rental in Alabama. A $4 million condo in Manhattan. All of it. Title companies had to file the name of the buyer, the seller, the address, and how the cash moved.

Flowers Title Company sued. Judge Jeremy Kernodle in the Eastern District of Texas said FinCEN overstepped. He tossed the whole thing. Nationwide injunction.

That is the part you heard about. Here is the part you did not.

FinCEN has been watching all-cash real estate deals since January 2016. Not through the rule. Through something called Geographic Targeting Orders. GTOs. They work under a different law, 31 USC §5326. That statute lets Treasury order any business in a specific area to report specific transactions.

No vote in Congress. No public comment period. No notice in the Federal Register. Just an order. Signed. Delivered. Done.

Each GTO lasts 180 days. Then FinCEN renews it. Then renews it again. They have been renewing these things for nine years.

Look. Here is the list. Maricopa County. That is Phoenix. Clark County. That is Vegas. Bexar County. San Antonio. Tarrant County. Fort Worth. Miami-Dade. Broward. Palm Beach. Cook County. Chicago. Los Angeles. San Diego. San Francisco. Honolulu. Washington, D.C.

The threshold is $300,000.

So. You buy a rental in Phoenix for $350,000. All cash. Through your LLC. The title company files a report on your deal. This week. Despite the ruling. The GTO covers it.

That $300,000 number sits right in the middle of the Sun Belt rental market. Right where a guy with a self-directed IRA and an LLC is shopping.

Here is why this is a different animal. The nationwide rule went through something called notice-and-comment rulemaking. FinCEN proposed it. People objected. FinCEN published it anyway. It used the front door. So a court could walk in that same front door and kill it. That is what Judge Kernodle did.

GTOs have no front door.

They are administrative orders under a separate statute. They skip the process that makes a rule easy to challenge. You can try to sue. The legal path is narrow. And hard. And expensive. And nobody has won.

I mean, the court killed the thing that could be killed. The thing that cannot be killed kept running.

This part is beautiful if you like watching bad plumbing.

The whole reason FinCEN wrote the nationwide rule was that money launderers started avoiding GTO counties. They moved deals to counties with no GTO. FinCEN said: see, the bad guys are routing around our orders, so we need a nationwide rule.

The court killed the nationwide rule.

So now the bad guys keep routing to non-GTO counties. And FinCEN says: see, the bad guys are routing around our orders. We need a new GTO for that county.

One county at a time. No judge. No comment period. Each expansion feeds the next expansion. People dodge Phoenix. Move to Tucson. FinCEN issues a GTO for Tucson. People dodge Tucson. Move to Reno. New GTO for Reno.

The surveillance footprint grows because people avoid it. The avoidance is the fuel.

FinCEN built the nationwide rule to replace the GTOs. A permanent fix for a patchwork of temporary orders. The permanent fix is dead. The temporary orders are still here.

"Temporary." Renewed every 180 days. For nine years. And counting.

The rule is dead. The orders renew in October. And then again in April. And then again. And then again.

Right.

The pipe still leaks.