Editor鈥檚 Note: On Friday, a federal judge put this policy on hold for ten money service businesses, including Reynosa Casa de Cambio, until April 25.
South Texas residents: If you plan to send money to relatives abroad or cash your paycheck, don鈥檛 be surprised when you鈥檙e now asked to give your social security number.
Beginning Monday, the Trump administration will require money exchanges like Casa de Cambio and Western Union along the U.S.-Mexico border to document every cash transaction between $200 and $10,000. That means customers will have to provide their social security number or other identification info. Someone who鈥檚 not a U.S. citizen or resident must show a passport, green card or other official document.
The policy change is intended to combat the illicit activities, such as money laundering, of drug cartels and other criminals, according to the announcement from the .
鈥淎s part of a whole-of-government approach to combating the threat, Treasury remains focused on leveraging all our available tools and authorities to better identify and counter these criminal activities,鈥� Treasury Secretary at the time of the announcement last month.
The order targets 30 zip codes along the border with Mexico in California and Texas, including in El Paso, Hidalgo and Cameron Counties.
Some business owners along the border are worried about the additional work this will create when they鈥檙e already required to file reports of large cash transactions, and said the policy could deter customers worried about their privacy. Immigrants who are here legally, and those without legal status who regularly send money to relatives in their home country, may be concerned about what the government will do with their information.
The decision to expand the type of cash transactions that are tracked is part of the Trump administration鈥檚 effort to crack down on drug cartels and other criminal gangs. Earlier this year, the state and treasury departments designated several groups as foreign or 鈥渟pecially designated鈥� terrorist organizations.
Albert Torres, a senior program manager at the George W. Bush Institute, who focuses on issues such as illicit finance, corruption and kleptocracy, said that similar tools were used years ago to identify cocaine trafficking activities from Colombia to New York City.
Tracking these cash transactions is an attempt to make money laundering and a practice known as 鈥渟tructuring鈥� more complicated, he explained.
鈥淪o [that鈥檚] when large deposits are broken up into smaller deposits in order to hide the fact they鈥檙e being laundered through different jurisdictions,鈥� Torres said. 鈥淔or example, rather than depositing $20,000 at once, you鈥檒l make 10 or 15 different deposits that eventually add up to that $20,000.鈥�
Other policy experts, however, raised concerns about who will actually be hurt by this order.
鈥淭he federal government says that it's targeting these cartels, money launderers, and groups bringing drugs into the country,鈥� said Nicholas Anthony, a policy analyst at the Cato Institute, a libertarian think tank. 鈥淏ut really what's happening with this is the federal government鈥檚 targeting everyone because that $200 level is so low.鈥�
Anthony said cash amounts starting as low as $200 is a 鈥減retty normal amount鈥� for people to send to family members living in another country, typically referred to as 鈥渞emittances.鈥� People who cash their paychecks at cash checking businesses will also end up having their personal information recorded, he said.
The Texas Newsroom reached out to FinCEN for comment but did not hear back.
Xavier Guerra is president of Reynosa Casa de Cambio, Inc., which has 13 locations across the Rio Grande Valley. All but two are located in the target zip codes. He said he鈥檚 alerted the federal government about his concerns of how his and similar businesses will be affected.
鈥淧roviding your social to exchange two hundred dollars is ridiculous,鈥� Guerra said.
Guerra said customers visiting from other countries may be reluctant to provide their passport or tourist visa number for fear that the information collected could be used to track them or deny them future entry to the U.S.
Plus, Guerra said filing reports for smaller amounts will only create more work for businesses like his. Money services businesses already file what鈥檚 known as a Currency Transaction Report for large cash transactions.
Business owners like Guerra are concerned they will ultimately have to cut staff or shut down if they lose customers. He said Americans who want to exchange dollars for pesos on their way to Mexico may decide to hold off and do that in Mexico instead.
鈥淲e wrote to FinCEN and we鈥檙e encouraging the general public to do the same thing,鈥� he said.
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