A federal judge in Texas said the cartel-targeting policy punishes law-abiding firms and offers little enforcement value.
A federal judge in Texas has temporarily blocked a new Trump administration policy targeting small-dollar cross-border transactions aimed at curbing cartel money laundering, siding with two businesses who argued it was crippling their operations and scaring off customers.
In a June 24 ruling, U.S. District Judge Leon Schydlower granted a temporary restraining order to Valuta Corporation and Payan’s Fuel Center, two El Paso-based money services businesses, finding they were likely to succeed on their claim that the policy—requiring reports of cash transactions as low as $200—was arbitrary and capricious.
The policy, imposed by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) through a Geographic Targeting Order (GTO) issued March 11, mandates that money service businesses in 30 ZIP codes across California and Texas file currency transaction reports on all cash transactions between $200 and $10,000. The reporting threshold was previously set at $10,000 under longstanding Bank Secrecy Act rules.
The new mandate, part of a broader Trump administration initiative to designate Mexican drug cartels as terrorist organizations and choke off their U.S. financing, was justified by officials as necessary to stop traffickers from breaking up large sums into smaller cash transactions to avoid detection.
But the plaintiffs—who testified earlier this year in a related case—said the policy instead ensnared law-abiding businesses in high-risk neighborhoods, driving away customers, and overwhelming staff with red tape. In court filings, both described staying up late into the night to complete paperwork and turning away regular customers unwilling to provide personal details such as Social Security numbers to convert or transmit modest sums.
Ashley Light, co-owner of Valuta, said her family’s business had operated since the early 1980s and had only ever filed 123 currency transaction reports (CTR) in all of 2024. Under the new rule, she was forced to submit approximately 1,600 reports in a single month—an explosion in paperwork she said threatened the business’s viability.
By Tom Ozimek
