The big day is coming. Title and escrow parties must be ready.
When the new Residency Rule (RRE) from FinCEN (Financial Crimes Enforcement Network) goes into effect on March 1, 2026, compliance will be an ongoing file-by-file obligation for title and escrow parties. This law significantly increases reporting requirements, rolls back stricter deadlines and penalties and increases responsibility for protecting sensitive information.
Difference between operational readiness and operational exposure
This new regulatory mandate will reveal a sharp divide between firms that are empowered by modern, efficient energy and those that still rely on hand-crafted, artificial technology tools and legacy systems.
Firms that navigate the new environment better—with minimal impact on operations and genes—will embed compliance directly into critical workflows. Instead of layering on compliance tools that increase complexity and cost, they will align people, processes and technology within secure, integrated systems, like Qualia, that they already use to run their business.
“There is no doubt that the new FinCEN rule presents real operational pressures for title teams and escrow teams,” said Brian Thome, Chief Consumer Officer at Qualia. “Companies that are meeting it head-on—by streamlining operations and reducing manual labor and risk with technology built directly into existing operations—will experience this change without disrupting their business.
Law explained: Regulatory change with daily impact
The Anti-Money Laundering (AML) Anti-Money Laundering Act from the Financial Crimes Enforcement Network (FinCEN) targets non-financial transactions involving legal entities or trusts.
“Non-financial” means transactions where there is no extension of credit securing the property. The rule may also apply if financing is provided by a lender that is not subject to AML/CFT or Suspicious Activity Report (SAR) requirements. FinCEN believes the regulations will combat and prevent money laundering.
Covered transactions require detailed reporting through FinCEN’s BSA E-Filing system. Required information includes:
- Location details
- Buyer and seller information
- Beneficial identity data (names, dates of birth, addresses, taxpayer IDs)
- Transaction amount and method of payment
- Information about consumer representatives
- Reporting a person’s name and contact information
FinCEN estimates that 800,000 to 850,000 transactions per year will fall under the law. In most cases, the filing obligation will come with the title and the escrow provider through a defined reporting cascade. Civil penalties remain at around $1,400 for each incomplete or incomplete filing, while a willful violation carries a fine of up to $250,000 and up to five years in prison.
Performance pressure introduced by the law
Law introduces conflict in unpredictable areas.
- Identifying reporting transactions early to be effective
- Collecting non-public personal information securely, even if buyers or sellers are reluctant to provide it
- Deadline tracking with increasing volume of files
- Ensuring accountability when multiple parties affect the same transaction
- Submit reports efficiently without manually re-entering extensive data
Manual procedures are binding under this burden. Email poses a security risk because of the sensitive information it collects. Spreadsheets have limited visibility. Ad-hoc processes fail as volume increases. In addition, technology used outside of the operating system can compound problems. Add-on tools can introduce multiple handoffs, duplicate data entry and new potential points of failure, where accuracy is most important. And when compliance tools charge per-file fees on top of those processing costs, the burden grows even heavier.
Combined, these stresses reveal a common failure mode: FinCEN compliance falls apart very quickly when it is fragmented into groups, tools and informal solutions. Under the pressure of volume and deadline, differentiation incurs cost and risk.
Why alignment determines compliance success
To operate reliably at scale, title and escrow firms must align people, processes and technology around repeat executions.
People need clarity
Parties must understand the law, be aware of reportable transactions and follow established agreements consistently. Designating a clear reporting line for FinCEN and defining responsibilities for all roles involved in the reportable activity helps prevent accountability gaps. Written expectations and measurable checkpoints reinforce reliability.
Processes build consensus
A structured workflow for data collection, reporting and internal communication reduces variation and is measured more effectively. Automating routine steps limits manual effort and error. Defined quality control reviews, exception management procedures and standard record keeping procedures continue to strengthen operations.
Technology determines whether this alignment is balanced
FinCEN reporting requires secure handling of sensitive information and reliable tracking of deadlines. Systems that embed compliance into the application’s closing workflow reduce friction and risk. However, some vendors may charge additional fees to use them. That additional cost burden comes at a time when a lawsuit challenging the rule from Fidelity National Financial (FNF) estimates compliance costs between $472 and $829 per transaction.
Embed FinCEN compliance without additional cost or hassle
Some title and escrow technology providers are anticipating the operational realities and costs of FinCEN legislation and have developed specific compliance capabilities. For example, Qualia, an AI-powered closing platform, took the approach enabling FinCEN to report part of how the shutdown works, at no additional charge to customers.
Rather than guiding customers through separate data collection programs or charging additional fees to access compliance functionality, Qualia has integrated FinCEN’s reporting capabilities directly into its unified, cloud-based environment—automating much of the reporting workflow in the process.
Qualia’s FinCEN compliance solution enables title teams and escrows to manage end-to-end reporting: flag reportable transactions, automate information collection and assignment, track file progress and deadlines and submit reports to FinCEN—all from the application they already use. The result is compliance that streamlines existing workflows instead of disrupting them, without additional technology.
“As soon as I was ready to start preparing for implementation, I discovered that Qualia had already done the work to create the solution and the educational tools that showed how to use it,” said David I. Williams, Partner and Vice President of Legal Compliance at Midtown, a real estate law firm. “Having reviewed all of these projects, I am confident that we have the tools we need to be successful at scale.”
That experience shows a broader lesson. When compliance infrastructure resides within a system that parties already trust, adoption occurs faster and implementation becomes more reliable.
The new reality: Compliance must be equal to business
March 1 marks the beginning of enforcement, not the end of change. Regulatory scrutiny will increase, and expectations regarding data management will increase.
Title and escrow firms that treat FinCEN compliance as a core competency—supported by the right people, processes and technology—will be positioned to absorb that pressure and succeed. Those who rely on manual workarounds, isolated systems or additional cost solutions will experience difficulties with all the new requirements.
Compliance is mandatory. There is no operational chaos. “Companies that invest in advanced, integrated infrastructure today will set the standard for strong title and escrow services tomorrow,” said Thome.
