https://kfoxtv.com/news/local/el-paso-money-services-sue-over-privacy-breach-in-federal-cash-transaction-mandate-texas-tx-financial-crime-enforcement-network-fincen-mexican-cartels-money-laundering-valuta-payan-institute-for-justice

Two El Paso businesses are suing the federal government over its new financial reporting mandates that target border communities, claiming they are unconstitutional.

On Friday, the Institute for Justice filed a lawsuit against the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury Department, following the order that went into effect April 14, which mandated check-cashing services and money transfer businesses in some border communities in California and Texas, including El Paso, to report all transactions over $200, when before they only had to report transactions of $10,000 or more.

While the order was put in place to reportedly combat money laundering schemes by Mexican cartels, the lawsuit claims that the new reporting requirements are an "illegal" invasion of privacy and an unnecessary burden on these businesses.

KFOX14/CBS4 spoke with Attorney Betsy Sanz from the Institute for Justice, who is representing El Paso businesses, the Valuta Corporation and Payan's Fuel Center, in this lawsuit.

Sanz emphasized the privacy concerns, noting that the rule demands too much personal information from customers, including names, addresses, and social security numbers, for what are relatively small transactions.

"You can imagine the quantity of private financial information that is now being shared with the federal government under this new rule," Sanz said.

To put things into perspective, Sanz said that the Valuta Corporation filed over 2,000 reports in the first few weeks of the order, compared to just 123 reports for larger transactions in 2024.

"That's 2,000 records of local people, El Paso customers, who now have their personal information sent to the federal government," Sanz said.

The lawsuit wants to extend the relief granted by previous court rulings in San Antonio and in San Diego, California.

In those instances, the courts found the rule illegal, however, the ruling is only limited to those specific plaintiffs.

"This third case filed in El Paso seeks to get relief for our clients, but also all the remaining money services businesses in Texas that still have to comply with this illegal order," Sanz said.

Sanz stressed the importance of the Fourth Amendment, stating,

The government can't just come in and demand all your personal information, including your financial information. When the government oversteps in such an enormous way like they've done here, people stand up and say no, and that's what's happening here.

KFOX14/CBS4 spoke with Andy and Samantha from Payan's Fuel Center, who said that they've lost about 20 percent of their business due to the order, adding that customers are surprised when they get suddenly asked to reveal personal information to cash a $200 check.

The order started in April and will remain in effect until September 9.

After the announcement was made, Treasury Secretary Scott Bessent emphasized the importance of the new order by saying, "...[it] underscores our deep concern with the significant risk to the U.S. financial system of the cartels, drug traffickers, and other criminal actors along the Southwest border."