A judge on Tuesday paused a new rule requiring money services businesses in Southern California to file detailed reports on any transaction over $200, a temporary victory for the San Diego woman suing over the order she says has created massive amounts of work for her business and sparked broader concerns over privacy.
The judge granted the request for the temporary restraining order for up to 28 days, halting the geographic targeting order from the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, known as FinCEN, that took effect last week.
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WATCH HEREThe order is aimed at curbing cartel activity and money laundering along the U.S.-Mexico border and applies to 30 ZIP codes across California and Texas. In San Diego County, those ZIP codes stretch from the border to downtown and as far north as Clairemont and Mira Mesa: 91910, 92101, 92113, 92117, 92126, 92154, 92173.
It requires businesses that offer check cashing, wire transfers, money orders and more to file Currency Transaction Reports for anything over $200, up from the previous threshold of $10,000.
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SIGN UP Esperanza Gomez owns Novedades y Servicios Plus in Southcrest and filed a lawsuit against FinCEN and the Treasury Department over the order.
She said the CTRs take up to 25 minutes apiece to complete and estimated that 98% of her customers make transactions worth more than $200. Gomez said customers were also opposed to sharing the information required, like their Social Security Number.
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"It was terrible because some people, most people don't want to provide their privacy information," Gomez said. "They're just leaving and they say, 'No, why, why, why? Why do I have to give them information for $200?' Everybody thinks it's the wrong way to do that."
"To put it simply, $200 could be just the cost of groceries one day," said Katrin Marquez, Gomez's attorney with the Institute for Justice.
FinCEN did not respond to multiple requests for comment on the temporary restraining order, which covers all impacted ZIP codes in San Diego and Imperial counties.
Marquez said the case also points to broader questions on the order's constitutionality.
"If the government can do this here, it can try to use similar justifications to do it elsewhere," Marquez said. "It can coerce small businesses to take their clients' information in order to do a dragnet search in the hope of maybe one day identifying a crime, even though there is no individualized suspicion."
"This case matters because the Fourth Amendment guarantees that you can't be searched unless the government suspects you of something, unless it has probable cause or it has a warrant from the court," she continued. "This order lets the government take in so much financial information about everyday Americans without going through that process."
For her part, Gomez is breathing a sigh of relief.
"I feel grateful," Gomez said. "I'm grateful because my clients can come to my store, and we don't have to invade their privacy."
The next hearing in the case was scheduled for May 15, at which point the judge is expected to rule on a request for a preliminary injunction to stop the order from taking effect the entire time the lawsuit makes its way through the courts.
