The Trump administration has introduced a new measure that will require all “money service businesses” located in 30 ZIP codes along the Texan and Californian borders with Mexico to file a currency transaction report (CTR) for all cash transactions which meet a new $200 threshold, down from the current limit of $10,000.
This means banks will need to file CRT’s for cash transactions of $200 or over, including those which take place via ATMs, in these areas. According to the Treasury’s Financial Crimes Enforcement Network (FinCEN), which introduced the measure, it is needed to “combat the illicit activities and money laundering of Mexico-based cartels and other criminal actors.”
Newsweek contacted FinCEN for comment via email on Tuesday outside of regular office hours.
Why It Matters
Since coming to power, the Trump administration has taken a number of steps aimed at combatting Mexican drug cartels which are accused of trafficking fentanyl and illegal migrants across the southern border, with eight officially designated as terrorist organizations.
However the latest FinCEN move has already sparked controversy over civil liberties, with the pro-limited government Cato Institute think tank claiming some U.S. citizens will face “a new level of financial surveillance.”
What To Know
In a statement released on March 11, FinCEN said it was issuing a Geographic Targeting Order (GTO) instructing all money service businesses, including banks and businesses that provide currency exchange or cash checking services, to fill out a CTR for cash transactions involving $200 or more across 30 ZIP codes.
It said the measure would begin “30 days after the date on which the order is published in the Federal Register,” then remain in place for “179 days thereafter.”
The order covers 30 ZIP codes spread across Webb, Maverick, Hidalgo, El Paso and Cameron counties in Texas along with San Diego and Imperial counties in California.
FinCEN said the move would help “in defending the United States from Mexico-based cartels, especially those trafficking fentanyl, and in otherwise protecting the U.S. financial system.”
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Banks have been required to record cash transactions of $10,000 or over since the 1950, with CTR’s included in the Bank Secrecy Act of 1970 and the threshold confirmed at $10,000 plus two years later. Since this time, the threshold has remained steady, meaning the number of CRT’s filed to the Treasury has surged due to inflation.
On Saturday, President Donald Trump invoked the Alien Enemies Act of 1798 to deport 250 alleged members of the Venezuelan Tren de Aragua (TdA) gang to El Salvador, where they will be imprisoned. The move came despite a federal judge issuing a temporary order to block the move, which the Trump administration said was void as it arrived when the deportees were already over international waters.
What People Are Saying
Secretary of the Treasury Scott Bessent commented: “Today’s issuance of this GTO underscores our deep concern with the significant risk to the U.S. financial system of the cartels, drug traffickers, and other criminal actors along the Southwest border.
“As part of a whole-of-government approach to combatting the threat, Treasury remains focused on leveraging all our available tools and authorities to better identify and counter these criminal activities.”
Nicholas Anthony, a policy analyst at the Cato Institute think tank, said: “More than one million Americans are about to face a new level of financial surveillance.” They added: “Financial surveillance in the United States has long needed reform, but this move is in the wrong direction.”
Reason, a publication which says it stands for “free minds and free markets,” said: “Clearly, the Trump administration is adamant that drug cartels south of the border should be brought to heel—hence the repeated calls by Republicans over the past few years for the U.S. to invade or bomb Mexico.
“But just as those methods would be an aggressive overreach of U.S. foreign policy, subjecting innumerable law-abiding citizens to additional financial surveillance is an aggressive overreach of fiscal policy.”
What Happens Next
The new currency transaction report requirements have already sparked a backlash from some small state and civil liberties campaigners, who argue it is excessively intrusive on ordinary Americans. It remains to be seen whether the measure will be extended to other counties along the U.S.-Mexican border and whether it will restrict cartel activity.