“This development is bad because of the fourth amendment, because it takes away the rest of the people’s financial privacy,” said lawyer Rob Johnson.
Americans living near the Mexican border are required to report money transactions of more than $200 to the federal government following a recent order from the Treasury Department.
This reduces the reporting threshold from previous levels of $10,000 and requires no warrant or evidence of the crime.
However, the new rules raised concerns about legitimate surveillance of law-abiding Americans.
“It already employs a huge, intrusive and burdensome financial surveillance system and it expands that system very much,” Rob Johnson, a senior lawyer at the Judicial Institute, told the Epoch Times.
Banks, payment service providers, and other companies that handle money with these ZIP codes “essentially spy on their own customers and fill out reports on customer activities that are submitted to the federal government,” Johnson said. “It will take away the financial privacy of those who use these businesses.”
The change was announced by the Financial Crime Enforcement Division (Fincen) on March 11th.
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“As part of a government-wide approach to combating threats, the Treasury is focusing on leveraging all available tools and authorities to better identify and counter these criminal activities.”
According to USA facts, fentanyl, which is often shipped across the US southern border, was responsible for more than 250,000 deaths in the US between 2018 and 2023.
In Fincen’s GTO, all money services businesses in the California and Texas File Currency Transaction Report (CTR) used Fincen for transactions of more than $200, “to combat illegal activities and money laundering of Mexico-based cartels and other criminals.”
“It’s temporary and limited to borders, but this policy shows a significant increase in fiscal surveillance,” Anthony told the Epoch Times.
“Most Americans believe their financial information is private and protected by the Fourth Amendment,” he said. “But what we really have is the fantasy of financial privacy.
“Bank secret laws, third party doctrines and other policies have wiped out the government any insights about our economic lives.”
In the case of California Bankers Association v. Schultz, the right of law enforcement to search American personal information without a warrant, raised concerns about the violation of civil liberties, based on what is known as the “third party doctrine,” but ultimately allowed the BSA to proceed based on what is known as the “third party doctrine.” The doctrine states that when Americans share personal information with third parties such as banks, they waive their privacy rights regarding that information.
However, when the BSA was passed in 1970, $10,000 was worth more than $83,000 today. Additionally, the amount of transactions captured under this Act grew continuously over time, as reporting thresholds were not indexed into inflation.
“In the 1970s, we were able to buy two new Corvettes for $10,000,” Anthony said. “It’s hard to imagine that they (the judges) are still OK. I’m seeing the threshold drop to $200 today only.”
Shortly after the BSA passed, the law raised concerns among Supreme Court judges that even a higher reporting threshold set in the early 1970s could threaten Americans’ fourth amendment rights, according to a 2022 investigation by Norbert Michel and Jennifer J. Schulp of the Cato Institute.
“When evaluating a much narrower administration, five Supreme Court judges, including Justice Thurgood Marshall, raised great concerns about the BSA requirements under the Fourth Amendment,” the report states.
The Supreme Court ultimately held that the BSA could proceed, but things have changed since 1974. Not only is the broadening scope of BSA, it is becoming increasingly difficult for Americans to live outside the financial payment system or without a bank account, undermining third-party doctrine.
In March 2023, Rep. John Rose (R-Tenn.), a member of the House Financial Services Committee, reintroduced the Bank Privacy Reform Act, which was first submitted in October 2022.
The court can also review the 1974 decision.
“In a sense, this development (Fincen GTO) is a bad thing for the Fourth Amendment, as it takes away the rest of the people’s financial privacy,” Johnson said. “But there is another sense that this could be exactly what the Fourth Amendment needs.
“This is exactly that offensive move and is so invasive to privacy, I think it’s likely that the courts have finally said this has gone too far,” he said.
One question that remains unanswered is whether the BSA offers important help in fighting crime, with regard to all its intrusions and costs.
During a hearing with the Treasury Secretary with then-Treasury Secretary Steve Munichin (RN.C.), a ranking member of the House Financial Services Committee, he repeatedly asked the Treasury Department and Finsen to seek evidence that unguaranteed oversight of US financial activities had contributed significantly to crime.
Mchenry said the information he received “doesn’t justify the burden” imposed by the BSA.
The Fincen GTO applies to the following ZIP codes for California and Texas: 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.
