Recent updates from FinCEN (Financial Crimes Enforcement Network) have introduced new regulations targeting Money Services Businesses (MSBs), particularly along the U.S.-Mexico border. Here are the key highlights:
- Geographic Targeting Order (GTO):
- Effective April 14, 2025, FinCEN issued a GTO requiring MSBs in 30 ZIP codes across California and Texas to file Currency Transaction Reports (CTRs) for cash transactions between $200 and $10,000.
- MSBs must also verify the identity of individuals conducting these transactions and retain documentation for at least five years.
- Purpose:
- The GTO aims to combat money laundering and illicit activities by Mexico-based cartels and other criminal actors.
- It is part of a broader effort to protect the U.S. financial system and curb the flow of illegal drugs.
- Compliance Challenges:
- Many MSBs, especially those not accustomed to filing CTRs, face a steep learning curve to implement the required processes within the short compliance window.
- The GTO applies broadly, covering various MSBs, including check cashers, money transmitters, and providers of prepaid access.
- Penalties:
- Non-compliance with the GTO can result in civil or criminal penalties for businesses and their employees.
These measures reflect FinCEN’s intensified focus on financial transparency and combating financial crimes in high-risk areas.
Sources
FinCEN Issues Southwest Border Geographic Targeting …
Effective April 14: FinCEN GTO Requires MSBs Along US …
FinCEN Issues GTO Imposing New Obligations on …
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