WASHINGTON (NEWSnet/AP) — The Biden administration wants to make residential real estate transactions more transparent by unmasking the owners of certain all-cash purchases.

It’s part of an initiative to combat money-laundering and the movement of “dirty” money through the U.S. financial system.

U.S. Department of Treasury’s Financial Crimes Enforcement Network proposed a regulation Wednesday that would require real estate professionals to report information about non-financed sales of residential real estate to legal entities, trusts and shell companies.

All-cash purchases of residential real estate are considered at high risk for money-laundering. The rule would not require the reporting of sales to individuals.

“Illicit actors are exploiting the U.S. residential real estate market to launder and hide the proceeds of serious crimes with anonymity, while law-abiding Americans bear the cost of inflated housing prices,” said Andrea Gacki, director of FinCEN.

The proposal is an "important step toward not only curbing abuse of the U.S. residential real estate sector, but safeguarding our economic and national security,” Gacki said.

In 2021, the White House announced a plan to launch record-keeping requirements to increase transparency in real estate transactions, to “diminish the ability of corrupt actors to launder ill-gotten proceeds through real estate purchases.”

Real estate is a commonly used vehicle for money laundering, due to opaque reporting rules on purchases. The degree to which criminal activity affects housing affordability is being studied.

Ian Gary, executive director of the transparency advocacy group FACT Coalition, said the proposed regulation “sends a clear message that the U.S. plans to close off options for criminals looking to hide their ill-gotten gains in our real estate markets.”

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