In March 2025 we reported on an order from the Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury commanding all money transfer agencies and currency exchanges in seven counties in California and Texas along the US-Mexico border to file reports with FinCEN including the identities of all customers engaging in all cash transactions over $200.

Separate lawsuits challenging this order were brought by the Institute for Justice on behalf of storefront financial services business in California and Texas.

FinCen revised and reissued the order several times, raising the reporting threshold from $200 to $1000 and changing the areas to which the order applied. But despite these moves by FinCEN, US District Courts in both California and Texas issued preliminary injunctions against enforcement of the order.

A year later, a panel of the 9th Circuit Court of Appeals has upheld the injunction in the California case by a 2-1 vote.

The majority of the 9th Circuit panel found that the rule was arbitrarily and illegally issued without the required notice and comment, that FinCEN failed to consider the impact on affected businesses (which would likely be put out of business by the cost of compliance, and whose customers would likely go to businesses in counties not subject to the order rather than provide the information required for FinCEN reports), that this harm was sufficiently severe and irreparable to justify a preliminary injunction, and that FinCEN’s repeated changes to its orders hadn’t rendered the case moot or  eliminated the need for the injunction.

The dissenting judge made a strained argument that being put out of business isn’t an “irreparable” harm sufficient to justify a preliminary injunction.

Unfortunately, neither the District Court nor the 9th Circuit addressed the rights of customers whose transactions would be reported to FinCEN, only the rights of the plaintiff money transfer and currency exchange businesses. Nor did the courts reach the plaintiff’s claims that the FinCEN order was an unreasonable search and seizure of information.

According to the 9th Circuit opinion:

Because the district court held that Plaintiffs were likely to succeed on their APA [Administrative Procedure Act] claims, the district court declined to address Plaintiffs’ claim that the Border GTO [Geographic Targeting Order] also violated the Fourth Amendment. We similarly decline to do so.

The government’s  appeal challenging the injunction in the Texas case is still pending in the 5th Circuit Court of Appeals.