Alert: New FinCEN Geographic Targeting Order
Article Highlights:
- Geographic Targeting Order
- Affected Areas and ZIP Codes:
- Money Services Business
- Impact on Reporting Requirements
- Covered Transactions
- Reporting Process
- Tax Preparers as MSBs
- Non-Compliance Penalties
- Action Steps
A Geographic Targeting Order (GTO) is an order issued by the Financial Crimes Enforcement Network (FinCEN) under the Bank Secrecy Act (BSA) that imposes additional recordkeeping or reporting requirements on domestic financial institutions or other businesses in a specific geographic area for a period not exceeding 180 days. However, the GTO may be renewed as necessary.
FinCEN has issued a new GTO impacting businesses, including tax preparers, classified as money services businesses (MSBs), in specific ZIP Codes across California and Texas near the southwest border. This order, effective from April 14, 2025, to September 9, 2025, imposes additional Currency Transaction Report (CTR) filing requirements for transactions involving currency above $200 but not more than $10,000.
Affected Areas and ZIP Codes:
- Imperial County, California: 92231, 92249, 92281, 92283
- San Diego County, California: 91910, 92101, 92113, 92117, 92126, 92154, 92173
- Cameron County, Texas: 78520, 78521
- El Paso County, Texas: 79901, 79902, 79903, 79905, 79907, 79935
- Hidalgo County, Texas: 78503, 78557, 78572, 78577, 78596
- Maverick County, Texas: 78852
- Webb County, Texas: 78040, 78041, 78043, 78045, 78046.
Money Services Business (MSB) - Under the regulations, a Money Services Business (MSB) includes any business that falls into any of the following categories:
- Currency Dealer or Exchanger: Businesses engaged in the exchange of currency.
- Check Casher: Businesses that cash checks for individuals or businesses.
- Issuer of Traveler's Checks or Money Orders: Businesses that issue traveler's checks, money orders, or other similar instruments.
- Seller or Redeemer of Traveler's Checks, Money Orders, or Stored Value: Entities involved in selling or redeeming such financial instruments.
- Money Transmitter: Businesses primarily engaged in the transmission of money.
- U.S. Postal Service: In specific roles related to these activities.
Impact on Reporting Requirements:
- Threshold Reduction: The GTO reduces the typical CTR reporting threshold from over $10,000 to transactions involving currency of more than $200 but not exceeding $10,000.
- Payment Methods: Reporting is specifically for currency transactions, meaning the physical exchange of cash. This does not automatically apply to checks, credit cards, or other non-cash payment methods.
- No Change for Typical CTRs and SARs: Covered businesses must continue to file CTRs for transactions in currency above $10,000 and Suspicious Activity Reports (SARs) where appropriate and in accordance with the BSA and applicable regulations.
Covered Transactions
- Transaction Types: The GTO covers each deposit, withdrawal, exchange of currency, or other payments or transfers by, through, or to the Covered Business involving transactions in currency. This specifically targets transactions involving physical cash, whether it's U.S. currency or foreign currency designated as legal tender.
- Dollar Threshold: The significant difference in this GTO is the reduced reporting threshold. The standard reporting requirement for Currency Transaction Reports (CTR) is applied to transactions over $10,000. However, under the GTO, transactions exceeding $200 but not more than $10,000 must be reported. This lowers the threshold significantly, making smaller cash exchanges reportable.
- Aggregation Rules: While the GTO requires transactions within the $200 to $10,000 range to be reported, businesses are not required to alter their existing aggregation practices unless specified by other regulations such as 31 CFR 1010.313 for transactions over $10,000.
- Payment Forms Excluded: The GTO specifically pertains to cash transactions. It does not include checks, credit cards, or other non-cash payment methods. Transactions involving physical cash deposits, withdrawals, or exchanges are the focus.
Reporting Process
- CTR Filing: Tax preparers classified as MSBs must electronically file a CTR through the BSA E-Filing System for any transaction exceeding the $200 threshold under the GTO. While filing, the keyword “MSB0325GTO” must be included in Field 45 of Part IV of the report.
- Reporting Timeline: Reports must be filed within 15 days of the covered transaction. This timeframe ensures that the government receives timely data on currency exchanges that may be of interest due to suspicious activities.
- Record Retention: Covered Businesses must retain records of compliance with the GTO, including filed reports, for at least five years from the last day the order is effective.
Tax Preparers as MSBs: Tax preparers located within these regions engaged in services qualifying them as MSBs under the GTO are required to adhere to these enhanced reporting obligations. It's important to note that simply collecting tax preparation fees in cash does not automatically classify a tax preparer as an MSB. They are classified as MSBs if they engage in one of the activities listed above as part of their business operations.
Non-Compliance Penalties: The penalties for non-compliance can be significant, including civil fines up to $286,184 per violation and possible criminal penalties.
Action Steps: MSBs in the affected areas should:
- Review their transactions to determine which fall under the GTO requirements.
- Ensure systems and processes are in place to capture and report the necessary details of these transactions within the 15-day reporting window.
- Consult with legal or compliance experts if there is any uncertainty in interpreting the GTO requirements.
For further information, please contact FinCEN or refer to official documentation for clarifications.
Be proactive. Stay compliant.
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