Border Businesses FIGHT BACK!

A federal crackdown on small cash transactions has ignited fierce legal resistance, with judges in California and Texas halting enforcement of a controversial $200 reporting rule.

At a Glance

FinCEN Lowered Cash Reporting Threshold from $10,000 to $200 in Select ZIP Codes

Federal Judges in California and Texas Issued Temporary Restraining Orders Against the Rule

Small Businesses Argue the Mandate Imposes Undue Burdens and Invades Privacy

Legal Challenges Question the Constitutionality and Effectiveness of the Measure

FinCEN’s Aggressive Move

In an effort to combat money laundering by Mexican drug cartels, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a Geographic Targeting Order (GTO) lowering the cash transaction reporting threshold from $10,000 to $200 in 30 ZIP codes across California and Texas. The order targeted money service businesses in regions like San Diego and Laredo, where cash-based commerce is prevalent.

FinCEN’s initiative aimed to unmask illicit financial activities by increasing scrutiny on smaller cash transactions. However, the drastic reduction in the reporting threshold raised concerns among business owners and civil liberties advocates about the practicality and legality of the measure.

Legal Pushback and Judicial Intervention

The new reporting requirement quickly faced legal backlash. In California, U.S. District Judge Janis Sammartino granted a temporary restraining order, siding with plaintiffs who argued that the mandate was arbitrary and unlawfully imposed. According to a report from Reason, Sammartino found the plaintiffs had “demonstrated a substantial likelihood of success on the merits of their claims.”

Similarly, in Texas, U.S. District Judge Fred Biery issued a temporary halt to the rule’s enforcement. As reported by Reuters, the order acknowledged the business community’s concerns about disruptions to legitimate commerce.

Watch a report on the incident at Cash is King: Judge blocks new rule ordering border exchanges to report orders over $200.

Small Businesses Bear the Brunt

Business owners in the affected regions voiced frustration over compliance burdens. Augustine Martinez, who runs an exchange house in Eagle Pass, Texas, explained to Fox San Antonio that average customer transactions range from $250 to $300—now triggering reporting requirements nearly every time.

The Institute for Justice argued that the mandate transforms small businesses into an unwitting surveillance network, burdening them with administrative overhead and potentially deterring customers. Senior attorney Rob Johnson described it as “an unprecedented and sweeping government surveillance system” that tramples on privacy rights.

Broader Implications and Ongoing Debate

Critics of the $200 reporting rule have questioned its real-world effectiveness, suggesting that savvy criminals will simply move transactions to untargeted areas or adopt cryptocurrencies. The broad scope of the order, they argue, distracts from more complex laundering operations and penalizes legitimate small-scale financial activity.

The legal challenges against FinCEN’s GTO reflect a wider national debate on balancing anti-crime oversight with civil liberties. These recent court decisions could set a precedent for future financial surveillance efforts, especially those that affect everyday transactions.

The temporary blocks issued by federal judges in both California and Texas represent significant hurdles to FinCEN’s initiative. As legal deliberations continue, the central question remains: how far should the government go in monitoring private financial activity in the name of national security?