TEXAS ASSOCIATION OF MONEY SERVICES BUSINESSES (TAMSB); HIGH VALUE, INC.; REYNOSA CASA DE CAMBIO, INC.; NYDIA REGALADO d/b/a BEST RATE EXCHANGE; MARIO REGALADO d/b/a BORDER INTERNATIONAL SERVICES; LAREDO INSURANCE SERVICES, LLC; E.MEX. FINANCIAL SERVICES, INC.; R & C, INC. d/b/a TEMEX MONEY EXCHANGE; SAN ISIDRO MULTI SERVICES, INC.; CRIS WIN INC. d/b/a BROWNSVILLE CASA DE CAMBIO; ESPRO INVESTMENT LLC d/b/a LONESTAR MONEY EXCHANGE; and ARNOLDO GONZALEZ, JR. v. PAM BONDI, Attorney General of the United States; SCOTT BESSENT, Secretary of the Treasury; UNITED STATES DEPARTMENT OF THE TREASURY; ANDREA GACKI, Director of the Financial Crimes Enforcement Network; FINANCIAL CRIMES ENFORCEMENT NETWORK
CIVIL ACTION NO. SA-25-CA-00344-FB
IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION
May 19, 2025
For readers unfamiliar with the technical legal analysis to follow, the Court invokes the spirit of Thomas Paine: “[It] is something very absurd . . . to be . . . governed by an island.” Common Sense 90-91 (1776). Here, the governing island is a small venue called the District of Columbia, 1,600 miles from the Texas-Mexico border. From such island emanated the Government regulation of Plaintiffs’ businesses.
The genesis of this controversy is an Executive Order dated February 20, 2025, followed by Government action reducing the historic threshold for money exchanges and transfers from $10,000 to $200. As a result, Plaintiffs would be required to process tens of thousands of documents to send to the Government instead of the relative handful previously needed. The new regulations do not apply to Plaintiffs’ competitors such as banks, credit unions, PayPal, Venmo, Wise and others, resulting in what the Court finds disparately impacts Plaintiffs (it also seemingly contravenes the adage, “what‘s good for the goose is good for the gander.“). Plaintiffs allege their livelihood will be irreparably harmed. The Court agrees and so finds and that Plaintiffs likely will succeed on the merits of at least one of their claims. Moreover, the Court finds that basic equity and fairness favor Plaintiffs.
Within the statutes and regulations relied upon by the Government the word “reasonable” is used several times. The Court finds not only is the Geographic Targeting Order (GTO) (not the Pontiac manufactured in the 1960s) likely unreasonable, but also that it likely overreaches, defies commonsense and, applying the correct legal standard to the facts, likely violates the Fourth Amendment of the Constitution‘s Bill of Rights prohibiting unreasonable searches and seizures and that it is likely “arbitrary and capricious.” The Court also finds the GTO likely violates the Administrative Procedure Act for not allowing notice and comment.
While the Government‘s goal of ferreting out illegal drug money laundering is laudable, the tactic employed here is akin to using a blunderbuss to target a fly, likely wreaking economic destruction on surrounding law-abiding citizens who the facts show are already subject to the “nth degree” of audits by Internal Revenue Service, Texas bank regulators and other extensive federal reporting requirements, all of which give the Government ample information of suspicious activities. Using proper law
Moreover, having observed numerous cases of money laundering techniques using airplanes, hidden vehicle compartments, real estate purchases, cryptocurrency and freezers (hence, “cold hard cash“), no self-respecting drug cartel or its Chinese enablers are going to launder millions of dollars supplied by American consumers (Economics 101) in $200 increments. See U.S. Dept. of Justice, Chinese National Sentenced to Ten Years in Prison for Laundering $62 Million in Drug Proceeds on Behalf of Mexican Traffickers (Dec. 16, 2024) (last visited May 18, 2025), available at https://www.www.justice.gov/usao-ndil/pr/chinese-national-sentenced-ten-years-prison-laundering-62-million-drug-proceeds-behalfjustice.gov. For that matter, why not $199? Or $198?
Additionally, the Government would require Plaintiffs to file reports on Mexican citizens exchanging pesos to dollars to shop in the United States. The Court has never seen nor heard of a case of money laundering from pesos to dollars. It appears the Government did not think. It hastily conceived and prematurely gave birth to the Geographical Targeting Order dated March 15, 2025, fathered three weeks before at 1600 Pennsylvania Avenue named Executive Order 14157.
Although Thomas Paine and his contemporary Benjamin Franklin wrote with feathers, they were quite wise, Mr. Paine in Common Sense and Dr. Franklin: “Take time for all things: Great haste makes great waste.”
For the in-depth reasons following, the preliminary injunction is granted.
Background
Before the Court are Plaintiffs’ Opposed Motion for a Preliminary Injunction (docket no. 22), the Government‘s response (docket no. 33) and Plaintiffs’ reply (docket no. 45) to Government‘s response, along with the public, non-privileged portions of the certified Administrative Record (sometimes referred to as “AR“) for the March 11, 2025 GTO that is the subject of this action (docket no. 28) and proposed findings of fact and conclusions of law filed by Plaintiffs (docket no. 49) and the Government (docket no. 51). The Court held a hearing on Plaintiffs’ motion on May 12, 2025. After careful consideration, the Court is of the opinion that the motion should be granted and a preliminary injunction should be entered as to Plaintiffs’ claims that the GTO violates the Fourth Amendment and the Administrative Procedure Act in that it was issued without the requisite notice and comment rulemaking and is arbitrary and capricious. The Court will take up Plaintiffs’ ultra vires and nondeligation arguments at a later date, if necessary.
The Currency and Foreign Transactions Reporting Act of 1970, its amendments, and the other statutes relating to the subject matter of that Act, have come to be referred to as the Bank Secrecy Act (“BSA“). The BSA authorizes the Secretary of the Treasury to impose reasonable reporting and other requirements on financial institutions and other businesses to help detect and prevent money laundering. These requirements are codified at
Separately, in the Anti-Drug Abuse Act of 1988, Congress amended the BSA to provide additional authority to the Secretary of the Treasury to collect information about certain transactions in geographic areas thought to pose particular risks.
The statute authorizes the Secretary of the Treasury to issue a Geographic Targeting Order or GTO to “obtain such information as the Secretary may describe” concerning “any transaction in which such financial institution is involved . . . the total amounts . . . of which are equal to or greater than an amount which the Secretary may prescribe” and require the financial institutions to maintain records and file reports. Id. The primary prerequisite is that the Secretary find ”reasonable grounds” to conclude “that additional recordkeeping and reporting requirements are necessary to carry out the purposes of” the BSA, “or to prevent evasions thereof.” Id. (emphasis added). The purposes of this particular subchapter are codified, and include, for example, requiring certain “highly useful” reports, facilitating the tracking of money sourced from criminal activity, and assessing the money laundering “risks to financial institutions, products, or services.”
In March of 2025, the Global Investigations Division (GID) of the Financial Crimes Enforcement Network (FinCEN), a bureau of the Department of the Treasury (Treasury), recommended the issuance of a public GTO to address cash-based money laundering along the southwest border by Mexican drug cartels linked to illicit opioid trafficking. FinCen issued the GTO on March 11, 2025, and it became effective on April 14, 2025.
The GTO lowered the threshold for filing Currency Transaction Reports (CTRs) from $10,000 to $200 for money services businesses, or MSBs, located in thirty zip codes along the southwest border. These zip codes are in two counties in California (Imperial and San Diego counties) and five counties in Texas (Cameron, El Paso, Hidalgo, Maverick, and Webb counties).
An MSB is generally any person offering check cashing, offering foreign currency exchange services, and/or selling money orders, traveler‘s checks, or pre-paid access products. See
FinCEN issued the GTO pursuant to
If [FinCEN] finds . . . that reasonable grounds exist for concluding that additional recordkeeping and reporting requirements are necessary to carry out the purposes of [the BSA] or to prevent evasions thereof, the Secretary may issue an order requiring any domestic financial institution or nonfinancial trade or business or group of domestic financial institutions or nonfinancial trades or businesses in a geographic area--
(1) to obtain such information as the Secretary may describe in such order concerning--
(A) any transaction in which such financial institution or nonfinancial trade or business is involved for the payment, receipt, or transfer of funds (as the Secretary may describe in such order), the total amounts or denominations of which are equal to or greater than an amount which the Secretary may prescribe; and
(B) any other person participating in such transaction;
(2) to maintain a record of such information for such period of time as the Secretary may require; and
(3) to file a report with respect to any transaction described in paragraph (1)(A) in the manner and to the extent specified in the order.
The purposes of the BSA include “requir[ing] certain reports . . . that are highly useful in criminal, tax, or regulatory investigations, risk assessments, or proceedings,” “facilitat[ing] the tracking of money that has been sourced through criminal activity or is intended to promote criminal or terrorist activity,” and “assess[ing] the money laundering . . . risks to financial institutions, products, or services to protect the financial system of the United States from criminal abuse and safeguard the national security of the United States.”
This GTO allegedly “carries out the purposes of the BSA by collecting data that is expected to be highly useful to law enforcement for case generation, ongoing investigations, and prosecutions targeting Mexican drug cartels” and “would assist FinCEN and law enforcement in identifying the extent to which [drug cartels] are exploiting MSBs to launder the proceeds of their crimes, thereby perpetuating narcotics trafficking and the synthetic opioid crisis in the United States.” (GID Memorandum [docket no. 28-2] at pages 4-5).
The $200 threshold was chosen because it reportedly includes “nearly all cash transactions vulnerable to abuse by drug cartels through structuring payments to avoid CTRs, while excluding clearly de minimis amounts that are more likely to be legitimate.” (GID Memorandum [docket no. 28-2] at page 16).
The GTO covers nineteen zip codes in five counties on the U.S.-Mexico border in Texas (the “Covered Geographic Area” or “CGA“). FinCEN selected the CGA based on an MSB‘s close proximity to the border, to a border crossing, and a high number of $10,000 or more CTRs relative to the population in comparison to other zip codes in 2024. (Docket no. 28-2 at pages 12-13).
The following Texas zip codes are in the Covered Geographic Area::
| Zip Code | Rationale |
|---|---|
| Cameron County | |
| 78520 | Borders Mexico; contains significant border crossings Brownsville B&M and Brownsville Gateway; 207 CTRs filed for a population of 64,949, the second highest CTR to population ratio in the county. |
| 78521 | Borders Mexico; contains a significant border crossing Brownsville-Veterans Port of Entry; 1,164 CTRs filed for a population of 88,708, the highest CTR to population ratio in the county. |
| El Paso County | |
| 79901 | Contains significant border crossing - El Paso-PDN Port of Entry; 501 CTRs filed for a population of 10,027, the fourth highest CTR to population ratio in the county. |
| 79902 | 420 CTRs filed for a population of 20,071, the fifth highest CTR to population ratio in the county. |
| 79903 | 2,414 CTRs filed for a population of 16,425, the highest CTR to population ratio in the county. |
| 79905 | Borders Mexico; contains a significant border crossing - El Paso-Bridge of the Americas Port of Entry; 2,603 CTRs filed for a population of 22,483, the third highest CTR to population ratio in the county. |
| 79907 | Contains a significant border crossing - El Paso Ysleta Port of Entry; 529 CTRs filed for a population of 78,652, the sixth highest CTR to population ratio in the county. |
| 79935 | 2,119 CTRs filed for a population of 17,523, the second highest CTR to population ratio in the county. |
| Hidalgo County | |
| 78503 | 451 CTRs filed for a population of 23,604, the second highest CTR to population ratio in the county. |
| 78557 | Borders Mexico; contains a significant border crossing - Hidalgo Port of Entry; 1,253 CTRs filed for a population of 13,986, the highest CTR to population ratio in the county. |
| 78572 | 256 CTRs filed for a population of 78,280, the fourth highest CTR to population ratio in the county. |
| 78577 | Borders Mexico; contains a significant border crossing - Pharr Port of Entry; 210 CTRs filed for a population of 79,937, the fifth highest CTR to population ratio in the county. |
| 78596 | 318 CTRs filed for a population of 37,329, the third highest CTR to population ratio in the county. |
| Maverick County | |
| 78852 | Borders Mexico; contains significant border crossings - Eagle Pass I and II Ports of Entry; 25 CTRs filed for a population of 56,712. |
| Webb County | |
| 78040 | Borders Mexico; contains significant border crossings - Laredo-World Trade; Laredo Bridge I; Laredo Juarez-Lincoln Ports of Entry; 702 CTRs filed for a population of 36,688, the highest CTR to population ratio in the county. |
| 78041 | Borders Mexico; 534 CTRs filed for a population of 48,491, the second highest CTR to population ratio in the county. |
| 78043 | 364 CTRs filed for a population of 43,473, the third highest CTR to population ratio in the county. |
| 78045 | Borders Mexico; contains a small border crossing-Laredo-Colombia Solidarity Port of Entry; 340 CTRs filed for a population of 65,354, the fourth highest CTR to population ratio in the county. |
| 78046 | 46 CTRs filed for a population of 71,956, the fifth highest CTR to population ratio in the county. |
FinCen‘s theory is that certain MSBs in close proximity to the Texas/Mexico border which already have a high number of CTRs at the current threshold of $10,000 are especially vulnerable to exploitation by drug cartels, including the Silaloa and Jalisco New Generation cartels. This is because:
- FinCEN data from 2024 shows “[t]he illicit financial activities of [drug cartels] pose risks to banks, [MSBs], and other entities . . . .” (Docket no. 28-2 at page 8) (quoting Treasury, “National Money Laundering Risk Assessment” (2024), p. 21 (https://home.treasury.gov/system/files/136/2024-National-Money-Laundering-Risk-Assessment.pdf.). The Court notes that, though FinCEN sees the same risks to banks, the banks are not required to file CTRs for $200 transactions.
- “President Trump signed Executive Order 14157 in February 2025, creating a process by which certain drug cartels have been named as Foreign Terrorist Organizations and Specially Designated Global Terrorists.” (Id. at page 9) (citing Executive Order 14157, “Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists,” https://www.whitehouse.gov/presidential-actions/2025/01/designating-cartels-and-other-organizations-as-foreign terrorist-organizations-and-specially-designated-global-terrorists/;
U.S. Department of State, “Designation of International Cartels” (Feb. 20, 2025), https://www.state.gov/designation-of-international-cartels/.).
The Court fails to see the logic or the connection between the alleged high number of $10,000 CTRs to $200 transactions being connected to money laundering. Additionally, as the Government points out, the zip codes are at high traffic points of entry which is where tourists and local people go to exchange dollars for pesos to cross into Mexico and Mexicans come into the United States to exchange pesos for dollars, which is different from remittances transferring money into Mexico. Obviously, the targeted businesses would be in those zip codes, which is analogous to “Why do you rob banks, Mr. Sutton?” because “That‘s where the money is.”
On April 1, 2025, the Texas Association of Money Services Businesses (“TAMSB“) filed this suit against Attorney General Pam Bondi, Secretary of the Treasury Scott Bessent, the Department of Treasury, Director of the Financial Crimes Enforcement Network Andrea Gacki and the Financial Crimes Enforcement Network to challenge the GTO requiring their ten MSBs to report transactions of $200 and higher. TAMSB‘s original complaint alleged the GTO imposes burdensome and discriminatory obligations on its members in violation of the Administrative Procedure Act (“APA“),
On April 9, 2025, TAMSB filed an application for a temporary restraining order. The Court held a hearing, with notice to The Government, on April 11, 2025. Later that day, the Court granted TAMSB‘s motion and issued a Temporary Restraining Order specifically excluding TAMSB and its ten MSBs from having to comply with the new requirement that they report all financial transactions of $200 and above. The Temporary Restraining Order only affected the ten MSBs which were already
With regard to the merits, the Court found: (1) Plaintiff demonstrated a substantial likelihood of success on the merits of its claims under the Administrative Procedure Act,
On April 18, 2025, TAMSB amended its complaint to identify its ten members and add an individual. The amended complaint alleges the GTO violates: (1) the APA because it is arbitrary and capricious, contrary to law, and exceeds the statutory authority of FinCEN to issue GTOs; (2) violates the Due Process Clause and Equal Protection Clause of the Fifth Amendment; (3) the Fourth Amendment right to be free from an unreasonable search; (4) the non-delegation doctrine because the statute under which FinCEN acted,
That same day, Plaintiffs also filed an opposed motion to extend the Temporary Restraining Order and an opposed motion for a preliminary injunction. Plaintiffs argue a preliminary injunction is warranted because they can demonstrate a likelihood of success on the merits of their claims that the
On April 21, the Court found good cause to extend the Temporary Restraining Order until May 9, 2025, and requested the parties to submit agreed upon dates for a preliminary injunction hearing.
Issue having been joined, the Court held a hearing on Plaintiffs’ motion for preliminary injunction on May 12, 2025. Prior to presenting their arguments and evidence, the parties announced they had agreed to extend the Temporary Restraining Order until May 16, 2025.
At the conclusion of the hearing, the Court granted Plaintiffs’ motion for a preliminary injunction, with the exception of the ultra vires and nondelegation arguments which have been taken under advisement. Specifically, the Court found that Plaintiffs are likely to succeed on the merits on at least one of their claims, are likely to suffer irreparable harm without an injunction, the balance of equities tips in favor of the Plaintiffs and an injunction is in the public interest. Accordingly, Defendants Pam Bondi, Attorney General of the United States Scott Bessent, Secretary of Treasury Andrea Gacki, and the Financial Crimes Enforcement Network, their agents and employees, are preliminarily enjoined from enforcing the April 14, 2025, Geographic Targeting Order against the Plaintiffs in this case. This written opinion follows the Court‘s rulings from the bench.
Preliminary Injunction Standard
Federal courts have equitable power to issue preliminary injunctions under
The first factor is “the most important.” Mock v. Garland, 75 F.4th 563, 587 n.50 (5th Cir. 2023). The latter two merge when the government is an opposing party. Nken v. Holder, 556 U.S. 418, 435 (2009). But no factor has a “fixed quantitative value.” Mock, 75 F.4th at 587. On the contrary, “a sliding scale is utilized, which takes into account the intensity of each in a given calculus.” Id. In sum, the “decision to grant or deny [relief] lies within the sound discretion of the trial court.” White v. Carlucci, 862 F.2d 1209, 1211 (5th Cir. 1989). The Fifth Circuit has granted preliminary injunctive relief in recent cases which this Court finds are instructive. See e.g., Texas Top Cop Shop, Inc. v. Garland, No. 24-40792, 2024 WL 5224138 (5th Cir. Dec. 26, 2024) (enjoining FinCEN from enforcing Corporate Transparency Act and its corresponding reporting requirements); Texas v. United States Dept. of Homeland Security, 123 F.4th 186 (5th Cir. 2024) (enjoining Border Patrol agents from removing razor wire installed by Texas on the southern border); Texas v. Yellen 105 F.4th 755 (5th Cir. 2024) (enjoining provision of American Rescue Plan Act that restricted states’ use of COVID-19 funds to offset tax cuts); Alliance for Hippocratic Medicine & U.S. Food & Drug Admin., 78 F.4th 210 (5th Cir. 2023) (partially reinstating restrictions on Mifepristone & reversing FDA decisions that had eased access), rev‘d on other grounds, 602 U.S. 367 (2024).
Supplementation of the Administrative Record
Plaintiffs’ filed an opposed motion to supplement the Administrative Record on May 8th, which the Court granted after hearing arguments at the preliminary injunction hearing on May 12, 2025. Plaintiffs moved to have the Administrative Record supplemented with all testimony and exhibits the Court heard at the temporary restraining order hearing, the declarations the Court received in support of Plaintiffs’ motion for preliminary injunction, and the testimony and exhibits from the preliminary injunction hearing. The Government reiterated their position that judicial review of the merits of Plaintiffs’ claims should be limited to review of the existing Administrative Record, not a new factual record made in district court.
A basic precept of procedural due process is notice and opportunity to be heard. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542 (1985) (“An essential principle of due process is that a deprivation of life, liberty, or property be preceded by notice and opportunity for hearing appropriate to the nature of the case.“) (alternations and citations omitted). The Government submitted portions of the transcript from the hearing on Plaintiffs’ motion for a temporary restraining order in support of their opposition to Plaintiffs’ motion for a preliminary injunction. (Docket no. 33-3). They cannot now seriously argue that Plaintiffs cannot present their own evidence in support of the motion. Moreover, the Administrative Record here consists solely of sources that FinCEN itself selected to justify the GTO. As Judge O‘Connor explained when granting a motion to supplement the agency‘s administrative record with outside evidence:
Whether an agency considered all relevant factors can sometimes only be determined by looking outside the record to see what the agency may have ignored. There was no public comment period during which Plaintiffs, or anyone else, could weigh in and correct errors in the agency‘s administrative process as it relates to FRT operation. Rather, Defendants classified FRTs as “machineguns” based entirely on their own analysis and on a record of their own making.
Imagine that, instead of machineguns, Defendants were classifying fruits. Imagine further that Defendants decided to evaluate an orange and in doing so, on their own and with no public input, determined that the orange is really a potato. Under Defendants’ view of the world, there would be no mechanism for challenging Defendants’ classification, even though it is plainly wrong, because there is nothing in the administrative record that says differently.
National Ass‘n for Gun Rights, Inc. v. Garland, 741 Fed. Supp. 3d 569, 600, 599 (N.D. Tex. 2024), appeal docketed, No. 24-10707 (5th Cir. Aug. 6, 2024)); see also Rethink 35 v. Texas Dep‘t of Transp., No. 1:24-cv-00092-ADA, 2025 WL 1191594, at *3 (W.D. Tex. Mar. 6, 2025) (granting motion to supplement record because Defendant Texas Department of Transportation failed to analyze highway expansion‘s impact on emissions and declined to prepare supplemental environmental impact statement in light of new national air quality standards).
Prior GTOs and Caselaw
In response to Plaintiffs’ motion for preliminary injunction, the Government lists examples of past GTOs imposing recordkeeping and reporting requirements, including at thresholds below the $10,000 threshold set by
In December of 1966, FinCEN issued a GTO in the New York City metropolitan area that required money transmitters and their agents to obtain report identifying information about the sender and receipt of all cash-purchased remittances to Colombia and the Dominican Republic in the amount of $750 or more. Id. FinCEN‘s press release dated December 23, 1966, explained that all money transmitters were targeted because a few had engaged in criminal activity:
Much of the foundation to justify the GTO was laid during investigations of several money remitters and their agents in New York. On July 24, 1996, Vigo Remittance Corp. pleaded guilty to structuring financial transactions to avoid standard BSA reporting requirements. Earlier this month, Remesas America Oriental was indicted for activities related to money laundering. Numerous other agents and their
employees have been successfully prosecuted for money laundering over the past few years.
https://www.fincen.gov/news/news-releases/treasury-acts-against-flow-dirty-money-colombia#:~:text=Treasury%20Under%20Secretary%20for%20Enforcement%20Raymond%20W.%20Kelly,million%20in%20illicit%20funds%20being%20sent%20to%2020.).
In October of 2014, FinCEN issued a GTO that required businesses in the Los Angeles Fashion District to report any instance in which it received at least $3,000 in cash. See (Docket no. 33 at Exhibit 1, corrected Gacki Decl. ¶ 7). Again, FinCEN‘s press release explained that businesses in the fashion industry were targeted because a few had engaged in criminal activity:
On September 10, more than 1,000 federal, state and local law enforcement officials were in the Fashion District, where they executed dozens of search warrants and arrest warrants linked to businesses suspected to be engaged in money laundering schemes and evasions of required BSA reporting. Criminal investigations have revealed evidence that many of these businesses are routinely accepting bulk cash as part of schemes involving black market peso exchange and trade-based money laundering on behalf of DTOs based in Mexico and Colombia. During the Sept. 10 enforcement action, HSI special agents seized what was ultimately determined to be more than $90 million in currency. The cash was found at various residences and businesses stored in file boxes, duffel bags, backpacks and even in the trunk of a Bentley.
https://www.fincen.gov/news/news-releases/fincen-issues-geographic-targeting-order-covering-los-angeles-fashion-district#:~:text=%E2%80%93The%20Financial%20Crimes%20Enforcement%20Network%20%28FinCEN%29%20announced%20today,businesses%20located%20within%20the%20Los%20Angeles%20Fashion%20District.
In April of 2015, FinCEN issued a GTO requiring electronics exporters near Miami to report currency transactions over $3,000 and to include in those reports information about the transaction. https://www.fincen.gov/news/news-releases/fincen-issues-geographic-targeting-order-covering-Miamit#:~:text=%E2%80%93The%20Financial%20Crimes%20Enforcement%20Network%20%28FinCEN%29%20announced%20today,businesses%20located%20within%20Miami. Like the GTO in this
The Government also cites United States v. Oreira, 29 F.3d 185, 187 (5th Cir. 1994), for the proposition that the Court “considered a Houston-area GTO with a $100 threshold.” (Docket no. 33 at page 4). In Oreira, two employees of Continental Transfer Services (“Continental“), an MSB in Houston, Texas, appealed from their criminal convictions on three counts of structuring in order to evade the $10,000 reporting requirement and to evade a GTO requiring Continental to file CRTs for any amount of money over $100 for a six month period beginning in March of 1991. Id. at 187. The opinion notes that a criminal investigation showed that the Defendants manufactured customer records to avoid the $10,000 reporting requirement applicable to all currency transmitters, and the $100 reporting requirement applicable to only Continental via the GTO. Id. However, the Fifth Circuit reversed the Defendants’ convictions and remanded the case for a new trial because the District Court refused to submit Defendants’ requested definition of the term “willfully. Id. at 188 (citing
After the Plaintiffs filed their motion for preliminary injunction, the Government filed the Administrative Record (sometimes referred to “AR“) in this case. (Docket no. 28). The AR includes criminal filings related to a corrupt MSB in Sacramento, California, (id. at pages 330-47), and another corrupt MSB in Atlanta, Georgia, (id. at pages 393-408).
Success on the Merits
Plaintiffs argue they have shown they are likely to succeed on the merits of their claims under the Fourth Amendment and the Administrative Procedure Act. The Government disagree.
Plaintiffs Have Shown the GTO Likely Violates the Fourth Amendment
Plaintiffs contend the GTO likely violates the Fourth Amendment because it allows The Government to search for evidence of criminal activity without a warrant and without individualized probable cause. The Government responds that Plaintiffs cannot show a likelihood of success on this claim because the Supreme Court has already rejected nearly identical claims in California Bankers Association v. Shultz, 416 U.S. 21 (1974).
Long before its decision in Schultz, the Supreme Court explained that a “search and seizure” without limits is equivalent to the “general warrants” which prompted the careful drafting of the Fourth Amendment and partly motivated the Declaration of Independence. Berger v. New York, 388 U.S. 41, 58 (1967). Although the Federalist Papers do not directly mention “general warrants, Federalist No. 84 touches on ideas related to civil liberties and government restraint, which are indirectly connected to concerns about general warrants. The Federalist No. 84 at 513 (Alexander Hamilton) (Clinton Rossiter ed., 1961). General warrants or “writs of assistance” were a major source of grievance for the colonists against British rule. Id. These warrants allowed British officials to search homes and
In Schultz, the Supreme Court upheld a uniform, nationwide requirement to report cash transactions over $10,000. Id. at 67. Here, the GTO is not uniform across the country and instead
targets particular MSBs and imposes special reporting burdens on all but de minimis transactions of less than $200.United States v. Morton Salt Company (“Morton Salt”), 338 U.S. 632 (1950), the primary authority in Shultz, is instructive. The Court in Morton Salt upheld an agency order directing twenty companies and a trade association to file reports verifying compliance with an FTC cease-and-desist order. Id. at 634–35. The Court upheld the reporting requirement on the ground that it was sufficiently related to the FTC‘s need to ensure compliance with its prior orders, but the Court also explained that authority to require reports is limited by the
With regard to business privacy, the Court agrees with Plaintiffs that it is likely the GTO unreasonably demands corporate records. The Court in Schultz held that the $10,000 reporting requirement did not violate the
In addition to providing detailed information about the MSB facilitating the transaction, and form the currency takes, each person involved in the transaction must reveal personal information, including: full legal name, age, gender, address, phone number, email address, social security number (or other taxpayer identification number), specific occupation (from a dropdown list of dozens), the number from a valid driver‘s license (or passport or alien registration card [i.e. green card]), amounts of money, and bank account numbers that transmit or receive the money. (Docket no. 22 at page 10). Plaintiffs argue requiring this additional information on every transaction over $200 unreasonably invades the privacy of customers.
The Government responds that Plaintiffs’ customers’ privacy lacks
Plaintiffs Have Shown the GTO Likely Violates the Administrative Procedure Act
The APA provides that a “reviewing court shall . . . hold unlawful and set aside agency action . . . found to be--(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law . . . [or] (C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.”
The Supreme Court overruled Chevron in Loper Bright, 603 U.S. at 412. Now, when an agency‘s interpretation of statute is challenged, the agency is not entitled to deference even when a
Statutes may authorize an agency to exercise discretion, and that discretion could take many forms. This includes the authority to define a statutory term that Congress chose not to elucidate, id. at 394-95 (citing Batterton v. Francis, 432 U.S. 416, 425 (1977)), the authority to “fill up the details” of a statutory scheme, id. at 395 (quoting Wayman v. Southard, 10 Wheat. 1, 43, 6 L.Ed. 253 (1825)), or merely the authority to regulate within the clear limits of statute in a manner that is “appropriate” or “reasonable.” Id. (emphasis added). When a statute delegates authority to an agency, “the role of the reviewing court under the APA is, as always, to independently interpret the statute and effectuate the will of Congress subject to constitutional limits” by “recognizing constitutional delegations, fixing the boundaries of the delegated authority, and ensuring the agency has engaged in reasoned decision-making within those boundaries.” Loper Bright, 603 U.S. at 395. (internal quotations, citations, brackets omitted, emphasis added).
Under the APA, federal courts must set aside “agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
Plaintiffs contend the GTO likely violates the APA because it is: (1) a rule subject to notice and comment, which never happened; (2) arbitrary and capricious, both due to a lack of support in the Administrative Record for such drastic action and because FinCEN ignored the widespread harms the GTO will cause Plaintiffs; (3) ultra vires in that the GTO statute,
Rule Subject to Notice and Comment
At the preliminary injunction hearing, the Court inquired whether Loper Bright is implicated in this case. Plaintiffs responded that question of whether the GTO is a “rule” or “order” is a question
Plaintiffs allege the GTO is invalid because FinCEN did not go through the notice and comment process required for substantive rules. In response, the Government contends “the challenged agency action is an order, not a rule, and therefore not subject to the rulemaking requirements of the APA.” (Docket no. 33 at page 14). The Government relies on
“[I]t is only when the agency seeks to make substantive law that notice and comment is required.” Flight Training, Inc. v. FAA, 58 F.4th 234, 241 n.5 (5th Cir. 2023). The APA defines “rulemaking” as the “agency process for formulating, amending, or repealing a rule.”
Nonetheless, as Plaintiffs note, “[t]wo principal characteristics distinguish rulemaking from adjudication.” (Docket no. 45 at page 9) (quoting Yesler Terrace Cmty. Council v. Cisneros, 37 F.3d 442, 448 (9th Cir. 1994)). “Adjudications typically ‘resolve disputes among specific individuals in specific cases, whereas rulemaking affects the rights of broad classes of unspecified individuals.’” City of Arlington v. FCC, 668 F.3d 229, 242 (5th Cir. 2012) (quoting Cisneros, 37 F.3d at 448), aff‘d, 569 U.S. 290 (2013).
[W]hen it became effective on April 14, 2025, the GTO applied to MSBs in the 30 zip codes uniformly, simply as result of their being MSBs. The GTO created an affirmative legal obligation for all MSBs—namely, filing CTRs for all transactions . . . $200 [and over]—that did not exist prior to April 14, 2025. All MSBs subject to the GTO likewise now face significant criminal and civil penalties, including prison sentences, for failure to comply with this new legal obligation. None of the MSBs subject to the GTO were parties before FinCEN in an adjudicatory proceeding prior to April 14, 2025.
(Docket no. 51 at page 22). As such, the GTO is not the equivalent of a “judgment” against specific parties as the result of an adjudication. See also Neustar, Inc. v. FCC, 857 F.3d 886, 888 (D.C. Cir. 2017) (explaining that no notice and comment rulemaking was required because case involved individualized adjudication about specific parties on specific record); National Biodiesel Bd. v. EPA, 843 F.3d 1010, 1014 (D.C. Cir. 2016) (same).
Finally, the Government notes that the GTO statute authorizes “confidential GTOs, which would not be possible with notice and comment rulemaking.” (Docket no. 33 at page 15). It follows that a confidential GTO would be issued to specific parties as part of a specific investigation under specific facts.
For these reasons, the GTO likely qualifies as a rule and therefore there is a requirement of notice and rulemaking when issuing the $200 reporting requirement. This Court concurs with Judge O‘Connor‘s example that an agency cannot simply decide to call “an orange a potato.” Cite. This Court finds that “a rose of any other name is still a rose.” Accordingly, the Court finds that Plaintiffs have
Arbitrary and Capricious: Dropping the Reporting Threshold by 98 Percent in Certain Zip Codes
Plaintiffs also allege the GTO is arbitrary and capricious. As noted, “[t]he APA‘s arbitrary and capricious standard requires that agency action be reasonable and reasonably explained,” and “[j]udicial review under that standard is deferential.” Prometheus Radio Project., 592 U.S. at 423 (emphasis added). In general, an agency action is arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, or offered an explanation for its decision that either runs counter to the evidence before the agency or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. State Farm Mut. Auto Ins. Co., 463 U.S. at 43. The reasoning on which an action was based must be articulated by the agency at the time the decision was made, and not developed after the fact. Texas v. United States, 40 F.4th 205, 226-27 (5th Cir. 2022).
Plaintiffs contend the GTO is arbitrary and capricious both due to a lack of support in the administrative record for such drastic action and because FinCEN ignored the widespread harms the GTO will cause legitimate businesses. The Government responds that Plaintiffs are not likely to succeed on the merits of this claim because FinCEN acted reasonably and considered all relevant factors when issuing the GTO.
The Scope of the Problem
Plaintiffs reply that FinCEN failed to consider the scope of the problem. The Court agrees that the FinCEN memo and administrative record identify problems but contain no evidence about the size of the problem relative to legitimate transactions:
“[I]llicit actors may move cash or checks to the southwest border from locations across the United States and then use the MSBs’ services to exchange the cash to pesos or to cash out checks, with the value moved to Mexico.” (Docket no. 28-2 at page 6). No discussion of legitimate versus illegitimate transactions. - “Drug cartels and their affiliated professional money laundering organizations often hire loosely associated parties, including ‘money mules,’ to move funds to Mexico via U.S.-based MSBs.” Memo at 7 (AR010). But the source is a single page from an FBI document about how to avoid being duped into becoming a “money mule.” (Docket no. 28-2 at page 304). No discussion of what fraction of MSB transactions involve money mules.
- “Structuring can be accomplished by dividing illicit proceeds between multiple individuals who conduct transfers at one or multiple MSB locations.” (Docket no. 28-2 at page 10). But the source is a 2019 FinCEN report that identifies MSBs as one of many tools drug cartels use, including online virtual currency such as bitcoin, “bulk cash smuggling,” “trade-based money laundering,” and “funnel account activity.” (Id. at 309-14). No discussion of what fraction of MSB transactions are illicit versus legitimate.
- The Memo identifies two criminal cases involving MSBs (from outside the targeted zip codes) whose owners were active conspirators. (Docket no. 28-2 at page 10) (citing AR323-402)). Nothing in the Record connects these cases to a $200 CTR requirement for legitimate MSBs.
(Docket no. 45 at pages 11-12).
$200 is Likely Arbitrary and Ignores the Destructive Impact on Legitimate Businesses
In their reply, Plaintiffs argue that the reporting requirements are financially ruinous and time consuming. The Government admits FinCEN set the threshold at $200 to capture all but de minimis illegal transactions, and concedes that this will also capture all but de minimis legal transactions. (Id. at page 12) (citing Docket no. 33 at pages 12–13). However, the Government does not attempt to justify the immense burden Plaintiffs have shown the GTO will likely impose on them. Plaintiffs estimate
And each of those CTRs takes time. Plaintiff Arnoldo Gonzalez estimates 25 minutes. Decl. of Arnoldo Gonzalez in Supp. of Pls.’ Mot. for Prelim. Inj. ¶ 18. The Government does not deny that FinCEN‘s own estimates are 8 minutes on average, and for non-bank filers like Plaintiffs, 23.93 minutes. Although the Government corrected a previous estimate as outdated at the preliminary injunction hearing, FinCEN had originally said it could take up to 40 minutes to fill out the CTR fillable form. See (docket no. 33 at Exhibit 2, page 1). Even at 24 minutes per form, it would take 40 hours to complete 1,000 forms. Plaintiffs have presented credible evidence that they would have to fill out far more than 1,000 CTRs.
With respect to compliance burdens on MSBs, the Government concedes FinCEN issued the GTO with a sentence dismissing those burdens. (Docket no. 33 at page 12) (stating that “FinCEN ‘does not expect these Covered Businesses to materially alter typical fees’”). Plaintiffs point out that the Government does not defend this conclusion; they simply state that the existence of this conclusion (about the impact on the prices MSBs charge) means that FinCEN must have considered all the potential burdens it was imposing: “Plaintiffs may disagree with that conclusion but there is no doubt the agency considered the relevant factors.” Id. The Court finds Plaintiffs have successfully made their case that there is doubt that the agency considered the relevant factors.
Plaintiffs point out that there is no evidence that there are more prosecutions in the targeted zip codes. FinCEN‘s theory is that CTRs lead to prosecutions and hence a $200 threshold will lead to many more CTRs and thus many more prosecutions. If this theory is true (prosecutions happen in proportion to CTRs filed with FinCEN), then the Government should have proof that the supposedly high number of over-$10,000 CTRs in the targeted zip codes has resulted in above average numbers of prosecutions. Yet, there is no such evidence in the record. But if $10,000 CTRs are not leading to more prosecutions, Plaintiffs question “why should anyone believe that exponentially increasing the number of CTRs via a $200 threshold will lead to more prosecutions?” (Docket no. 45 at page 16).
The Government argues that “[l]ogically, [the targeted zip codes] in general are likely to be targeted by cartels because ‘they are nearer to the entry points for drugs and human beings smuggled into the United States and to the exit points for bulk physical cash.’” (Docket no. 33 at page 13). Plaintiffs reply that this is not logical. According to Plaintiffs, the Government cares “most about electronic remittances, which can be sent from anywhere. Indeed, the two criminal cases in the Administrative Record are in northern California and Georgia, not the border, and bulk physical cash, by definition, isn‘t going through MSBs. Even assuming drug and human smuggling takes place at border checkpoints, the Court agrees with Plaintiffs that it isn‘t “logical” to “believe that the illicit revenue from these crimes is going to be sent back to Mexico via thousands of structured transactions via MSBs right at the border.” (Id. at page 16).
There Was No Consideration of Cartel Countermeasures
Plaintiffs contend that cartels can exploit non-targeted zip codes. (Docket no. 45 at page 16) (“San Diego [Texas] is a Swiss cheese of targeted and non-targeted zip codes”) (citing provided maps
Plaintiffs further point out that FinCEN‘s own sources cast doubt on the supposition that cartels are remitting millions of dollars back to Mexico via small-dollar cash transactions, noting what the administrative record shows: “[I]t would take approximately 2,564 deposits of the average $390 remittance to move a million dollars across the border.” (Id. citing docket no. 28-2, AR at page 160). That report in the administrative record further explains that rather than use implausible numbers of low-dollar money transfers, cartels use China-based money launderers and cryptocurrency. (Id.) In other words, according to Plaintiffs, FinCEN itself relies on sources that say the GTO will be ineffective but ignores them. (Id.).
FinCEN‘s Capacity to Act on the CTRs
Plaintiffs further asks whether FinCEN has the capacity to turn millions of new CTRs into actionable leads and real prosecutions. Again, the administrative record contains no evidence that FinCEN is routinely using $10,000 CTRs for prosecutions. And at the preliminary injunction hearing, the Government conceded it has no real information as to whether FinCEN has the capacity to act on the $200 CTRs it has received or whether those CTRs have led to usable information about the structuring activity of Mexican cartels. (Cite). Finally, as noted above, the Government cites criminal court proceedings, but those involved corrupt MSBs outside the targeted zip codes, not prosecutions against members of drug cartels for activity related to currency structuring. See United States v. Oreira, 29 F.3d 187 (GTO targeting single corrupt MSB in Houston, Texas); AR at pages 330-47 (criminal filings related to corrupt MSB in Sacramento, California); id. at pages 393-408) (criminal filings related to corrupt MSB in Atlanta, Georgia, (id. at pages 393-408).
Irreparable Harm
Plaintiffs contend the GTO causes them economic harms, loss of goodwill and reputation, and loss of their constitutional rights are irreparable. In response, the Government argues Plaintiffs have exaggerated the cost of complying with the GTO, have failed to “explore[] automated alternatives like automated batch-filing, and they otherwise merely speculate about the future actions of customers. (Docket no. 33 at page 24). The Government also casts doubt on harms via Defendant Gacki‘s declaration, which “demonstrates that many covered businesses have begun filing CTRs with respect to the covered transactions.” (Id. at docket 33-1, corrected Decl. of Andrea Gacki). Plaintiffs reply that they don‘t doubt they have because the penalties for noncompliance are “ruinous and can include prison; of course they are doing whatever they can to comply.” (Docket no. 45 at page 18) (emphasis in original). At the temporary restraining order hearing, the Court heard that the affected MSBs neighbor with banks, and MSB customers “are going to walk to the bank right in front of us, where they [have] already put [up] big signs about that they‘re going to exchange pesos, in front of our stores, or they‘re just going to go across the border and exchange in Mexico.” (Id. at page 17). And MSB customers know that the MSBs are going to ask for their social security numbers, their visa and other paperwork, and ““[t]hey‘re just going to walk right next door, and they‘re going to exchange with the bank.” (Docket no. 33, Exhibit 2 page 51). The Court also heard testimony that 99 percent of most MSBs’ business comes from typical tourists, families and people like truck drivers who routinely cross the border, and the average transaction is $200. (Id.).
The Equities
Plaintiffs argue that their likelihood of success on the merits and profound irreparable harms mean that Plaintiffs are entitled to a preliminary injunction. The Government responds that, “in the face of Plaintiffs’ weak evidence of harm to a few MSBs, the agency‘s finding that these recordkeeping requirements are necessary to address money-laundering and cartel activities along the southwest border should carry the day.” (Docket no. 33 at page 36). As Plaintiffs contend, it is always in the public interest to enjoin the violation of individuals’ constitutional rights; (2) when it comes to Plaintiffs’ claims under the APA, there is “no public interest in the perpetration of unlawful agency action,” (quoting Texas v. Becerra, 577 F. Supp. 3d 527, 562 (N.D. Tex. 2021)); and (3) the Government‘s equities argument is just a general argument that Mexican cartels pose “profound national security, homeland security, terrorist financing, and money laundering threats.” (Id. at page 20) (quoting docket no. 33 and Gacki Decl. at docket no. 33-1 ¶¶ 28–33) (generically asserting this GTO is important for law enforcement)). Accordingly, the Court finds the equities weigh in Plaintiffs’ favor.
Plaintiffs request that the Court “vacate the GTO and enjoin its enforcement everywhere.” (Docket no. 45 at page 21) (quoting Corner Post, Inc. v. Board of Governors of Fed. Res. Sys., 603 U.S. 799, 826 (2024) (Kavanaugh, J., concurring) (“[T]he APA authorizes vacatur of agency rules.”)). Plaintiffs’ request for vacatur and enjoinment entirely is denied, subject to the forthcoming opinion by the Supreme Court in Trump v. Casa, Inc., No. 24A884, regarding universal injunctions.
Conclusion
Having held a hearing on Plaintiffs motion and upon consideration of arguments presented by Plaintiffs and the Government, along with the administrative record, supporting memorandum, declarations and exhibits, and having adopted relevant portions of Plaintiffs’ proposed findings of fact and conclusions of law:
IT IS ORDERED that Plaintiff‘s Opposed Motion for Preliminary Injunction (docket no. 22) is GRANTED such that the Court finds:
- Plaintiffs have demonstrated a substantial likelihood of success on the merits on their claims that the GTO violates the
Fourth Amendment to the United States Constitution and the Administrative Procedure Act. - Plaintiffs have demonstrated serious irreparable harm, including the destruction of Plaintiffs’ businesses, loss of reputation and goodwill.
- The balance of equities favors Plaintiffs because of the constitutional and statutory implications and the public interest is served by maintaining lawful operations of regulated financial institutions and preventing unlawful agency action.
IT IF FINALLY ORDERED that Plaintiffs shall not have to post a bond.
It is so ORDERED.
SIGNED this 19th day of May, 2025.
FRED BIERY
UNITED STATES DISTRICT JUDGE
Edelmiro Agustin Martinez is the owner of Laredo Insurance Services (“Laredo”), an MSB and Plaintiff in this case, with 8 locations in Webb County, Texas. All locations are covered by the GTO. Laredo is a family-owned check cashing and currency exchange business. Ninety-nine percent of Laredo‘s customers are “typical tourists” and the average transaction is $200. At the temporary restraining order hearing, Mr. Martinez testified that the GTO is going to affect his daily operations because Laredo “neighbors with some banks” and “now the people know that we‘re going to ask for the Social Security, their visa and everything” so “they‘re just going to walk right next door, and they‘re going to exchange with the bank” or they‘re going to go to one of “about 300 Casas de Cambio right across the border” because “they‘re not under the GTO.”
Mr. Martinez also said that he does not have the number of employees necessary to carry out the GTO reporting requirements and that customers would refuse to wait in line for them to do so. Mr. Martinez further stated that customers will go elsewhere in order to avoid “giving out their Social Security [number] for smaller transactions.”
Mr. Martinez testified he had engineers trying to modify Laredo‘s software to “batch software” to comply with the GTO, but that would cost thousands of dollars for stores like Laredo and smaller MSBs. Many would lose business and have to lay-off employees, or even shut down.
Mr. Martinez further testified he would probably join Walmart stores that have “already put signs on their [local] stores that they‘re just going to do transactions under $200” and watch customers walk into the bank right in front of Laredo, “where [the bank] has already put [up] big signs . . . that they‘re going to exchange pesos” or watch as their customers go across the bridge and exchange their currency in Mexico.
Mr. Salinas said they do not have the capacity to handle the increase in CTRs. He estimates that San Isidro would need about six or seven employees per day just to focus on the CTRs. Mr. Salinas testified that San Isidro does not have the funds, the knowledge or the space to accommodate those employees.
Mr. Salinas also said that the majority of San Isidro‘s customers will not return if San Isidro must comply with the $200 reporting requirement. He said he knows this because San Isidro has been receiving customers from other MSBs right across the street who are covered by the GTO.
Andres Payan, Jr. is the manager of Payan‘s Fuel Center, Incorporated (“Payan‘s”), a family-owned convenience store/gas station and MSB that cashes payroll checks for low income workers in El Paso. Payan‘s is not a plaintiff in this case and has been complying with the reporting requirements of the GTO since it went into effect in April of 2025. At the preliminary injunction hearing, Mr. Payan testified that the GTO has had several negative impacts on his business. These include a 30 percent drop in revenue from check cashing, a drop in how many trucks come by per week to buy gas, and how many cigarettes he‘s selling and other secondary kinds of purchases like Cheetos and beer. He thinks people are “skipping by” Payan‘s because they “have an apprehension about giving, you know, a clerk at a gas station their Social Security number.” And “it takes longer and it‘s a lot more difficult to cash
Anna Isabel Alvarado‘s testified that her family-owned business, Reynosa Casa de Cambio, Incorporated (“Reynosa”), is an MSB and a Plaintiff in this lawsuit. Reynosa has 13 locations: 11 of the locations are within zip codes covered by the GTO, and 2 are outside of the GTO. Reynosa files about 30 CTRs per month at the $10,000 threshold, and would be filing 6,000 to 7,000 CTRs per month at the $200 threshold. At twenty-five minutes per CTR, Ms. Alvarado said it is an insurmountable amount of work with currently 11 locations in the GTO. She said she has looked into streamlining the process, but has gotten no direction from FinCEN or relief on the batch filing system. She also said that Reynosa locations covered by the GTO lost 50 percent of their customers over the Mother‘s Day weekend. She believes they did not want to wait in long lines or give their personal information when exchanging such a small amount of currency, particularly given that identity theft is increasing so much.
Plaintiff Arnoldo Gonzalez, Jr. is the owner of High Value, Inc (“High Value”), an MSB covered by the GTO with a single location in Laredo, Texas. High Value exchanges dollars to pesos, pesos to dollars, and nothing else. High Value is located five blocks from the International Bridge linking Laredo, Texas, to Nuevo Laredo, Mexico. He described what life is like in a border town. Families go back and forth, relatives go shopping, and tourists also cross the border frequently. Many locals, including Mr. Gonzalez, have family in Nuevo Laredo who work in Laredo. Mr. Gonzalez said that he often visits his physician in Nuevo Laredo and exchanges a few hundred dollars to cover the cost of the visit and medication. He does not believe he should have to divulge his personal information and
Clarissa Ashley Light and her family own Valuta Corporation (“Valuta”) in El Paso, Texas. Valuta is not a plaintiff in this case and is subject to the GTO. Valuta was the first MSB to be licensed in Texas. At its single location, Valuta exchanges currency, cashes payroll checks and does currency transactions as an agent of MoneyGram. It takes about 20 minutes to complete a CTR. But, Valuta has had to cap the transactions to just under $200 until she and other staff can catch up with the pending CTRs. About 75 percent of Valuta‘s transactions are currency exchange.
Since the GTO went into effect on April 14, 2025, Valuta has gone from filing 10 CTRs to filing 1,500 CTRs a month, with a current backlog of about 700. As it is, Ms. Light has been working on CTRs until “midnight, 1 or 2 in the morning.” And, these numbers do not even include the loss of Valuta‘s MoneyGram business.
Valuta has also seen a big drop in customers since it has been complying with the GTO. Many have left because they do not want to wait in line or fill out the paperwork. Valuta has called “all hands on deck right now,” but that is not stopping customers from going elsewhere. And, Valuta has attempted to obtain help from FinCEN several times to no avail.
In sum, the witnesses testified that the GTO‘s impact on the MSBs has been skyrocketing labor costs, a permanent decrease in customers, and a decrease in revenue because the fees charged are proportionate to the amount exchanged. The explosion in paperwork is a threat to MSBs’ employees’ livelihood and there is a subsequent danger that the GTO could destroy family businesses.