We have written previously about the new administration’s significant shifts in its approach to criminal enforcement and prosecution of money laundering cases.  Specifically, we wrote about shifts at the U.S. Department of Justice (DOJ) as seen in United States Attorney General Pamela Bondi’s February 5, 2025 memorandum outlining the ways in which the DOJ will aim to eliminate cartels.  With respect to money laundering, the memo establishes that DOJ will “prioritize investigations, prosecutions, and asset forfeiture actions that target activities” of cartels.  Later in the month, on February 20, 2025, the U.S. Department of State designated six Mexico-based drug cartels Foreign Terrorist Organizations and Specially Designated Global Terrorists.  Now, the U.S. Department of Treasury has joined in.  On March 11, 2025, Treasury’s Financial Crimes Enforcement Network (“FinCEN”) announced its issuance of a Geographic Targeting Order (GTO) that strongly signals its own efforts to combat cartel activity by requiring more information about cash transactions from money services business along the Mexican border.  

FinCEN’s GTO requiring all money services businesses (MSBs) – check cashing companies, currency transmitters and foreign exchange dealers, among other financial services businesses – located in 30 ZIP codes across the southwest border in California and Texas to file Currency Transaction Reports (CTRs) with FinCEN at a $200 threshold in connection with cash transactions.  Aligning with DOJ’s priorities with what Treasury Secretary Scott Bessent called a “whole-of-government approach,” FinCEN announced that the purpose of the GTO was to “further combat the illicit activities and money laundering of Mexico-based cartels and other criminal actors along the southwest border of the United States.”  Secretary Bessent continued that the “issuance of this GTO underscores [the United State’s] 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.”

Federal law requires financial institutions to report currency (cash) transactions over $10,000 conducted by, or on behalf of, one person, as well as multiple currency transactions that aggregate to be over $10,000 in a single day.  These transactions are reported on CTRs.  To this end, financial institutions must obtain personal identification about the individual conducting the transaction such as a Social Security number as well as a driver’s license or other government issued document.  With the new GTO, FinCEN significantly lowers the $10,000 dollar threshold, requiring MSBs along the southwest border to flag cash transactions at only $200.  Of note too is the fact that the GTO does not change Suspicious Activity Report-filing obligations but states that FinCEN “encourages the voluntary filing of [Suspicious Activity Reports] where appropriate to report transactions conducted to evade the $200 reporting threshold imposed . . . .”

The GTO takes effect on April 14, 2025 and will remain in effect for 180 days.  The GTO, of course, may be renewed. 

What does this means for financial institutions?

• MSBs that operate in the impacted areas along the southwest border should consider the impact on customer-facing functions.  Customer-facing employees will need to be trained on the new limits.  The MSBs may even need to increase staffing to the extent that completing CTRs for more customers simply takes more time. 

• MSBs should also consider the impact on non-customer facing employees.  MSBs’ compliance teams will want to take steps such as assessing resources needed to comply with the order and manage what may be a significant increase in the number of CTRs completed by customer-facing employees and reviewing and updating their compliance procedures.  Given the new priorities of both DOJ and FinCEN and its focus on combatting illicit finance by drug cartels and other illicit actors along the southwest border, MSB compliance teams should prepare for additional scrutiny of their current CTR and SAR-filing procedures and likely increased law enforcement outreach in the form of requests for SAR-supporting materials, grand jury subpoenas, and less formal inquiries.

• Banks that have MSBs as customers should consider what changes, if any, they should make to the policies and procedures in their own anti-money laundering programs.

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