Paramount Title Agency
FinCEN GTO
The latest FinCEN GTO includes many Colorado counties. Here is what you need to know:
FinCEN = Financial Crimes Enforcement Network, a bureau of the United States Department of the Treasury
GTO = Geographic Targeting Order
The GTO is a regulatory tool implemented by the U.S. Department of the Treasury to combat money laundering and illicit activities in the real estate market. By monitoring certain real estate transactions, FinCEN can better track the flow of money and identify any patterns or activities that may indicate illicit behavior.
The order requires title companies to report certain real estate transactions to the government to ensure transparency and prevent the misuse of funds.
Effective May 24, 2023, under the FinCEN GTO, title companies are required to report transactions that meet the following requirements:
- Purchase transactions involving residential (1-4 family) properties in the following counties of Colorado: Adams, Arapahoe, Clear Creek, Denver, Douglas, Eagle, Elbert, El Paso, Fremont, Jefferson, Mesa, Pitkin, Pueblo, and Summit
- Purchase price is $300,000 and above.
- Buyer is a legal entity, meaning not individual people or trusts.
- There is no loan being made by an institutional lender, such as a mortgage company or bank.
Real estate agents need to know their buyers will be asked to provide the names of all of an entity’s owners. All owners of at least 25% of the equity interests of the purchasing entity will be required to provide government issued identification. Agents will play a crucial role in explaining this requirement to their buyers. Title companies will not be allowed to close a transaction without first collecting this documentation.
Additionally, if the purchasing entity is owned by other entities, ownership information will need to be provided until actual human owners are identified.
Remember, the FinCEN GTO is designed to protect the real estate industry from being misused for illicit purposes and to maintain the integrity of the financial system as a whole. By understanding and complying with these regulations, real estate agents contribute to a safer and more transparent marketplace.