MARCH 19, 2025
In this photo illustration, One Dollar bill notes are displayed on January 11, 2025. Anna Barclay/Getty Images
People living in 30 zip codes along the United States-Mexico border are set to face a new level of scrutiny when they send money overseas or exchange currency, in a government effort to counter money laundering by cartels.
Federal authorities could now be flagged when someone tries to convert $200 or more, rather than the standard $10,000, following an announcement by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
“A big concern here is that the vast majority of people who are going to get caught up in their surveillance or conducting perfectly innocent transactions and I can say that because that is what we see across the country,” Nicholas Anthony, policy analyst at the libertarian-leaning Cato Institute, told Newsweek Tuesday.
“It’s not going to be catching the actual stated target, whether that be the cartels, the drug runners or other criminals.”
Why It Matters
FinCEN’s Geographic Targeting Order (GTO) comes after the Trump administration designated Mexican cartels as Foreign Terrorist Organizations (FTOs) last month, meaning potentially harsher penalties for those found to be involved in their activities or funding them.
Many immigrants living close to the southwest border do sent money back home to loved ones or will make currency exchanges in order to cross the border and use services in nearby towns.
What To Know
About a million people live in the Texas and California zip codes impacted by the new reporting threshold, Anthony said.
Zip codes in Imperial and San Diego Counties in California, along with Cameron, El Paso, Hidalgo, Maverick, and Webb Counties in Texas. Areas in Arizona and New Mexico were not included, even though they also border Mexico. It was not immediately clear why they were left off the new guidelines.
All money-service businesses in these areas on the map will now have to file reports on transactions with a $200 threshold so that they can be checked for illicit activity. Anthony said it is likely that those below this amount will also need to be filed, while anyone refusing to cooperate could face penalties.
Residents could now be asked for extra information when they want to convert cash, such as their name, address, Social Security number or employment details. Anthony believes some businesses may stop offering such services because of the additional reporting burden.
FinCEN said this was a temporary policy change, allowing them to combat drug cartels and the flow of fentanyl into the U.S., reflecting the wider Trump administration’s efforts to halt cartel and transnational criminal gang activity.
Similar programs have been in place before. During the Biden administration, it came to light that Homeland Security Investigations (HIS) had been acquiring financial records from Western Union and Maxitransfers Corporation, looking at transactions over $500. Immigrants sued ICE over the discovery.
Anthony said financial institutions already file over 27 million such reports each year based on the regular $10,000 threshold, which was set in the 1970s and has not changed with inflation.
Out of those, around 370 criminal investigations were opened as a result.
What People Are Saying
Nicholas Anthony, speaking to Newsweek: “For a lot of folks, they’re going to go up to the counter and find out all of a sudden that they need to hand over a lot more information than they’re used to. For some that’s going to be a temporary burden, but for others, it’s going to be much more costly when they find out that the price is increased of these services or some of these businesses shut down completely because they simply can’t afford to be reporting pretty much every transaction to the federal government.”
Treasury Secretary Scott Bessent, in a press release: “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.”
What’s Next
The change will take effect April 14 and will run until at least September 9 of this year. Anthony said he would like to see reporting thresholds raised instead, and that law enforcement should stick to the Fourth Amendment and justify its reasons for suspected crimes, rather than potentially infringing on everybody’s privacy.
Courtesy/Source: Newsweek
