A Texas judge strikes down the Treasury Department’s invasive financial surveillance program targeting border communities, ruling it a harmful overreach that would hurt small businesses while doing little to stop actual criminal activity.
Key Takeaways
- A federal judge in Texas granted temporary relief to two small businesses from the Treasury Department’s “Geographic Targeting Order” that lowered cash reporting thresholds from $10,000 to $200 in border ZIP codes.
- Judge Leon Schydlower determined the policy could be easily circumvented by criminals simply by crossing streets between covered and uncovered ZIP codes.
- This marks the third federal court rejection of the controversial financial surveillance measure.
- The ruling specifically protects Valuta Corporation, Inc., and Payan’s Fuel Center, Inc., which argued the policy harmed their operations and violated customer privacy.
- The temporary restraining order expires on July 8 but could be extended as the legal challenge continues.
Border Businesses Win Temporary Victory Against Government Overreach
In a significant victory against government overreach, U.S. District Judge Leon Schydlower has granted a temporary restraining order blocking the Treasury Department from enforcing its controversial “Geographic Targeting Order” against two small businesses operating near the southern border. The Treasury regulation, which was ostensibly designed to combat money laundering by drug cartels, slashed the cash transaction reporting threshold from the standard $10,000 to a mere $200 for businesses in certain border ZIP codes. This drastic reduction would have forced businesses to file reports on virtually all substantial cash transactions.
The lawsuit was brought by Valuta Corporation, Inc., and Payan’s Fuel Center, Inc., which successfully argued that the policy placed an unreasonable burden on their daily operations and would drive away customers concerned about privacy. The businesses demonstrated that complying with such extreme reporting requirements would significantly impact their ability to serve their communities and maintain competitive operations. Judge Schydlower’s decision represents a pushback against the federal government’s tendency to implement sweeping regulations without adequate consideration for their practical impacts on law-abiding citizens and businesses.
Judge Highlights Fatal Flaws in Treasury’s Approach
In his ruling, Judge Schydlower pointed out a fundamental flaw in the Treasury Department’s targeting strategy: its geographic limitations made it practically useless against organized crime. The judge noted that cartels and money launderers could easily circumvent the regulation by simply conducting transactions in adjacent ZIP codes not covered by the order. This obvious loophole undermined the government’s entire rationale for imposing such burdensome requirements on businesses in the first place, revealing the policy as more performative than practical.
“The judge highlighted that the policy could be easily circumvented by crossing streets between covered and uncovered ZIP codes,” according to reporting from Fox Business.
This ruling marks the third time federal courts have rejected similar Treasury Department regulations, following earlier temporary restraining orders issued by U.S. Judges Janis Sammartino in California and Fred Biery in Texas. The consistent judicial skepticism suggests serious legal and constitutional concerns with the government’s approach to monitoring border financial activities. While the current order is narrow in scope, protecting only the two businesses that filed the lawsuit, it contributes to a growing legal precedent against overly intrusive financial surveillance.
Balancing Security Concerns With Constitutional Rights
The Treasury Department’s attempted regulation reflects a broader pattern of government agencies implementing heavy-handed policies that disproportionately burden law-abiding citizens while failing to effectively target actual criminal enterprises. By reducing the reporting threshold to $200, the policy would have created mountains of paperwork documenting routine transactions by ordinary Americans, while sophisticated criminal organizations would simply adapt their operations to avoid detection. This approach illustrates the frequent disconnect between Washington bureaucrats and the practical realities faced by businesses and communities near the border.
Judge Schydlower’s temporary restraining order expires on July 8, though it may be extended as the legal challenge proceeds. For now, Valuta Corporation and Payan’s Fuel Center have secured protection from a regulation that threatened their businesses and customers’ privacy rights. The case highlights the importance of judicial checks on administrative overreach and reinforces the principle that even well-intentioned security measures must be balanced against constitutional protections and practical effectiveness. Americans living in border communities deserve security solutions that actually work, not symbolic gestures that merely increase government surveillance of innocent activities.
