The Washington Report

March 11, 2024

In This Issue

Climate Change
SEC Approves Climate Disclosure Rule

Money Laundering and Terrorism Financing
FinCEN Issues New Proposed Rule for the Real Estate Sector

 

Climate Change


SEC Approves Climate Disclosure Rule

On March 6, 2024, the U.S. Securities and Exchange Commission (SEC) voted to approve a significantly scaled-back proposal to require publicly traded companies to disclose a variety of climate-related information, including details about the climate risks they face, the costs of severe weather events and, in some cases, their greenhouse gas emissions.

In addition to other aspects of the original proposal that were scaled back, the agency most notably dropped its so-called Scope 3 disclosures, which would have required certain large companies to provide data about the emissions generated by their suppliers and customers (their “value chain”). Opponents of the mandate argued that the provision was unworkable and risked roping in private companies that supply publicly traded ones, such as REALTORS® who are independent contractors but are affiliated with large real estate companies.

NAR’s comment letter to the SEC raised concerns about the original proposal, Scope 3 emissions and the proposal’s impact on the real estate industry.
 

SEC Climate Disclosures: SEC.gov | SEC Adopts Rules to Enhance and Standardize Climate-Related Disclosures for Investors

Russell Riggs, rriggs@nar.realtor, 202-383-1259

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Money Laundering and Terrorism Financing


FinCEN Issues New Proposed Rule for the Real Estate Sector

On February 16, 2024, the Financial Crimes Enforcement Network (FinCEN) issued a Notice of Proposed Rulemaking (NPRM) titled Anti-Money Laundering Regulations for Residential Real Estate Transfers. The rule imposes reporting and record keeping requirements on certain persons involved in real estate closings and settlements for non-financed residential real estate transactions.

The purpose of the rule is to address money laundering, and illicit financial crimes involving real estate. The rule imposes a cascading reporting requirement, where certain persons involved in real estate transactions are required to file a “Real Estate Report” no later than 30 days after the date of closing. FinCEN expects that the Real Estate Reports would be filed and submitted by settlement agents, title insurance agents, escrow agents, and attorneys. FinCEN has created and issued a fact sheet on the issue that is helpful as well. 

NAR will submit a formal comment on the proposed rule, and will continue to remain engaged on the topic of anti-money laundering and illicit financing within the real estate sector.

Nia Duggins, nduggins@nar.realtor, 202-383-1085

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