Nicholas Anthony
More than one million Americans are about to face a new level of financial surveillance. The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that the threshold for currency transaction reports has been lowered from $10,000 to $200 for Americans living in 30 zip codes in California and Texas. Financial surveillance in the United States has long needed reform, but this move is in the wrong direction.
FinCEN officially announced the temporary policy change as an effort “to further combat the illicit activities and money laundering of Mexico-based cartels and other criminal actors along the southwest border of the United States.” Treasury Secretary Scott Bessent said, “As part of a whole-of-government approach to combatting the threat, [the] Treasury remains focused on leveraging all our available tools and authorities to better identify and counter these criminal activities.”
While this announcement is disappointing, it is not surprising. Alex Nowrasteh, the Cato Institute’s vice president for economic and social policy studies, warned people in February that President Trump’s decision to designate cartels as terrorists could have repercussions for civil liberties and the economy at large. Specifically, Nowrasteh noted that the designation would allow the government to freeze assets, enact secondary sanctions, and take greater control of the financial system generally.
What makes this announcement especially troubling is that the $10,000 threshold for currency transaction reports is long overdue for reform. At the very least, many people agree that the amount should be adjusted for inflation. Whether you base that adjustment on the reporting done under the Trading with the Enemy Act in 1945, the enactment of the Bank Secrecy Act in 1970, or the Treasury’s regulation of currency transaction reports in 1972, it’s clear that this reporting regime has gotten out of hand (Figure 1).
Yet, instead, we are seeing a drastic increase in financial surveillance, making the problem even worse.
Whether it’s the mob or the cartel, organized crime is not an easy thing to deal with. However, this challenge does not mean Americans should have their rights stripped away in the pursuit of justice. As Fight for the Future warned Congress in 2023, “Should [criminals] successfully tempt the United States to abandon the human right to privacy and the U.S. Constitution, everyone will lose.” That was true when the Biden administration tried to surveil bank accounts with just $600 in activity, and that is true now that the Trump administration is surveilling as little as $200 in activity.
