With National Small Business Week underway, Washington has a timely opportunity to show it understands what small businesses actually need. Too often, policymakers say they support Main Street while overlooking what new compliance demands look like for the local companies serving their communities.
The American Land Title Association represents an industry in which 90% of companies are small businesses. These are local title and settlement companies serving homebuyers in every corner of the country. They help families buy homes, protect property rights, and stop fraud before it spreads. They are not giant compliance shops with legal departments and spare staff. They are Main Street businesses.
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When a family buys a house, a title company helps them get to the closing table safely and securely. Title professionals are the people behind the scenes making sure the seller can legally transfer the home and that the homebuyer is protected from a fraudulent transaction. The vast majority of title companies are neighborhood businesses.
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That is why FinCEN’s residential real estate reporting rule has hit Main Street so hard. The goal is legitimate: stop criminals from laundering money through real estate. ALTA supports that goal. But a rule meant to catch criminals should not end up punishing honest homebuyers and the small businesses that serve them.
ALTA’s new survey shows how disruptive the new rule is. In a nationwide survey of nearly 1,300 professionals, 66% said transactions were delayed because of the rule. Eighty-five percent said buyers or sellers raised privacy or data security concerns. Fifty-eight percent reported consumer concern about delays, and 45% said buyers or sellers refused to provide the information needed for reporting. Those are not small numbers. They are a flashing warning light.
The real-world impact is easy to understand — buying a home is already stressful. Families are juggling mortgage deadlines, moving trucks, school calendars, lease expirations, and rate locks. Then, in the final stretch of the process, they are asked for sensitive personal and financial information they never expected to hand over. That does not feel like smart government. It feels like Washington forgot there are real people on the other end of the form.
Small title companies felt the burden at every step: collecting data from customers, explaining the rule to buyers and sellers, training staff, working through questions with realtors, and simply determining whether a transaction was even covered. More than half of respondents said they had to dedicate staff to the reporting process. For a small business, that is not a paperwork tweak. It is a new cost, a new compliance risk, and a new way for closings to be delayed.
The answer is not to abandon the fight against money laundering. It’s about understanding how the rules work for the people on the front lines. ALTA has urged FinCEN to make several practical changes, such as focusing reporting on higher-value transactions instead of low-value transfers; excluding transactions where ownership is not really changing; limiting payment information requests to what professionals handling the closing can realistically obtain; and eliminating seller financial and tax data collection that adds a major burden with unclear law-enforcement value.
The goal should be a rule that is practical and workable. Policymakers can preserve the rule’s purpose while reducing unnecessary burdens on the small businesses and consumers navigating the homebuying process in the real world.
There is still time to get this right. A federal court paused the rule on March 19, giving FinCEN until May 18 to decide whether to appeal. FinCEN should use this window to listen to consumers’ and the title industry’s concerns. And if reporting resumes, small businesses need clear guidance and lead time.
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Washington has a choice. It can double down on a rule that has already delayed closings, frustrated consumers, and strained small businesses. Or it can fix the rule so it targets criminals without tripping up honest buyers and sellers. Everyone, including Main Street title companies, deserves the second option.
ALTA welcomes the opportunity to work with policymakers on a rule that does what it is supposed to do: catch criminals who launder money through real estate while easing the burden on the small businesses that help people close on homes, protect buyers, and preserve property rights.
Chris Morton is the CEO of the American Land Title Association.
