The US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) is set to expand its cash reporting requirements, targeting individuals living or doing business in 30 specific ZIP codes along the southwest border. Starting April 14, 2025, money services businesses in these areas will need to report cash transactions exceeding $200.
The new Geographic Targeting Order (GTO) aims to combat money laundering and other financial crimes, particularly affecting cartels and organized crime groups. However, critics argue that the move could also ensnare unbanked individuals who rely heavily on alternative financial services.
According to the Federal Deposit Insurance Corporation (FDIC), 4.2% of US households were unbanked in 2023, with certain populations facing higher rates of exclusion from traditional banking. The new GTO has sparked controversy, with libertarian think tank Cato Institute declaring it “in the wrong direction.”
The expansion of cash reporting requirements is part of a broader trend in financial surveillance, which has raised concerns about privacy and data protection. The IRS recently introduced new rules requiring reporting on third-party settlements, which have also been met with criticism.
As the GTO takes effect, experts warn that it could drive more financial transactions underground, potentially harming vulnerable populations who rely on alternative financial services. With no clear guidance on how the ZIP codes were selected or how the reporting requirements might be implemented, further comment from FinCEN is limited.
The impact of the GTO will depend on how it is enforced and whether it effectively addresses the issue of money laundering while also protecting the rights of unbanked individuals and small business owners.
Source: https://www.forbes.com/sites/kellyphillipserb/2025/03/14/new-trump-financial-reporting-rule-aims-to-capture-cash-transactions-as-low-as-200