FinCEN’s New Rule Targets Border Transactions, Raises Privacy Concerns

‘This development is bad for the Fourth Amendment because it takes away what’s left of peoples’ financial privacy,’ attorney Rob Johnson said.

A Mexican National Guard officer patrols border area in eastern Tijuana, Baja California State, Mexico, on March 5, 2025. Guillermo Arias/AFP/Getty Images

Money transfers of $200 or more, if conducted through a money service business in more than two dozen ZIP codes across California and Texas, will soon have to be reported to the Treasury Department’s Financial Crimes Enforcement Unit (FinCEN). The new rule significantly expands the scope of warrantless searches of Americans’ financial activity in what officials say is an effort to fight Mexican drug cartels.

It reduces the reporting threshold from the prior level of $10,000, and no warrant or evidence of a crime is required.

The new rule has raised concerns regarding warrantless surveillance of law-abiding Americans, however.

“This takes a financial surveillance system that is already enormous and intrusive and burdensome, and it expands that system enormously,” Rob Johnson, senior attorney at the Institute for Justice, told The Epoch Times.

FinCEN’s geographic targeting order (GTO) requires that all money service businesses located in 30 ZIP codes across California and Texas file currency transaction reports (CTRs) with FinCEN for cash transactions of $200 or more to “combat the illicit activities and money laundering of Mexico-based cartels and other criminal actors along the southwest border,” FinCEN stated on its website.

Transactions covered under the new ruling will include deposits, withdrawals, currency exchanges, and other payments or transfers by a money service provider in these ZIP codes. According to the GTO, transactions covered by the new rule include transactions “in currency, of more than $200 but not more than $10,000.”

Companies that provide these services will be “essentially spying on their own customers and filling out reports on the activities of their customers to file with the federal government,” Johnson said. “It’s going to take away the financial privacy of people who use those businesses.”

The changes were announced on March 11 by the Financial Crimes Enforcement Unit (FinCEN).

“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,” Treasury Secretary Scott Bessent said in a statement.

“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.”

According to USA Facts, fentanyl, which is often shipped across America’s southern border, was responsible for more than 250,000 deaths in the United States between 2018 and 2023.

As a result of FinCEN’s new order, more than one million Americans will have their transactions caught up in this surveillance net, according to Nicholas Anthony, a policy analyst at the Cato Institute’s Center for Monetary and Financial Alternatives.

“Although it’s temporary and limited to the border, this policy marks a massive increase in financial surveillance,” Anthony told The Epoch Times. 

“Most Americans believe their financial information is private and protected by the Fourth Amendment,” he said. “What we really have, however, is the illusion of financial privacy.

“The Bank Secrecy Act, the third-party doctrine, and other policies have given the government sweeping insights into our financial lives.”

The Bank Secrecy Act (BSA) became law in 1970, with the stated intent of fighting organized crime and money laundering. It mandated that banks, credit unions, broker-dealers, payment companies, insurance companies, casinos, and other institutions that handle money report any bank transactions of $10,000 or more to FinCEN. 

Although the right of law enforcement to search Americans’ private information without a warrant raised concerns about violating civil liberties, courts ultimately allowed the BSA to proceed, based on what is known as the “third-party doctrine,” in the case of California Bankers Association v. Shultz. This doctrine states that when Americans share their personal information with a third party, such as a bank, they surrender their right to privacy regarding that information. 

When the BSA was passed in 1970, however, $10,000 was the equivalent of more than $83,000 today. And because the reporting threshold was never indexed to inflation, the volume of transactions captured under this law expanded continuously over time.

“In the 1970s, you could buy two new Corvettes for $10,000,” Anthony said. “It’s hard to imagine they [judges] would still be okay with it now, seeing the threshold was lowered to just $200 today.”

According to a 2022 study of the BSA by Norbert Michel and Jennifer J. Schulp of the Cato Institute, soon after the BSA’s passage, the law raised concerns among Supreme Court judges that it could threaten Americans’ Fourth Amendment rights, even at the higher reporting thresholds set in the early 1970s. 

“When evaluating a far narrower regime, five Supreme Court justices, including Justice Thurgood Marshall, raised major concerns with the BSA’s requirements under the Fourth Amendment,” the report states. 

The Supreme Court ultimately ruled that the BSA could proceed, but circumstances have changed since 1974. Not only has the scope of the BSA broadened, but it has become increasingly difficult for Americans to live outside of the financial payments system or without a bank account, undermining the third-party doctrine.

In March 2023, Rep. John Rose (R-Tenn.), a member of the House Financial Services Committee, reintroduced the Bank Privacy Reform Act, which was first submitted in October 2022.

Regarding the BSA, Rose stated that the government “basically deputized banks as law enforcement agencies, mandating them to collect information on their customers and report that information to the federal government.”

The courts may also revisit the 1974 decision.

“In some ways, this development [the FinCEN GTO] is bad for the Fourth Amendment because it takes away what’s left of peoples’ financial privacy,” Johnson said. “But there’s another sense in which this could just be exactly what the Fourth Amendment needs.

“This is just such an aggressive move and it intrudes on privacy so much that I think there is a good chance that the courts say this has finally gone too far,” he said. 

One question that remains unanswered is whether the BSA, for all its intrusions and costs, has provided material help in fighting crime.

In a 2020 hearing with then-Treasury Secretary Steve Mnuchin, Rep. Patrick McHenry (R-N.C.), ranking member of the House Financial Services Committee, repeatedly asked the Treasury Department and FinCEN for evidence that warrantless surveillance of Americans’ financial activity contributed significantly to prosecuting crimes.

McHenry stated that the information he received “does not justify the burden” the BSA imposed. 

The FinCEN GTO applies to the following ZIP codes in California and Texas: Imperial County, California: 92231, 92249, 92281, 92283; San Diego County, California: 91910, 92101, 92113, 92117, 92126, 92154, 92173; Cameron County, Texas: 78520, 78521; El Paso County, Texas: 79901, 79902, 79903, 79905, 79907, 79935; Hidalgo County, Texas: 78503, 78557, 78572, 78577, 78596; Maverick County, Texas: 78852; and Webb County, Texas: 78040, 78041, 78043, 78045, 78046.