Federal Court Halts Ruinous Financial Surveillance for El Paso Businesses

EL PASO, Texas—Today, an El Paso federal court put a temporary halt to financial surveillance rules that threatened two local small businesses and intruded on the financial privacy of their customers. Ashley Light, owner of Valuta Corporation, and Andy Payan, of Payan’s Fuel Center, teamed up with the Institute for Justice (IJ) to challenge the Financial Crimes Enforcement Network (FinCEN) over its new requirement that certain businesses in targeted ZIP codes to report all cash transactions above $200. The normal reporting requirement is for cash transactions over $10,000.

 “Today the court recognized that FinCEN’s rule makes no sense. Even if you seriously think the cartels are changing dollars into pesos 200 bucks at a time, there’s still no reason to apply this to businesses like Valuta and Payan’s but not identical businesses a few minutes down the road,” said IJ Senior Attorney Andrew Ward.

Federal courts in San Antonio and San Diego have already enjoined the unprecedented requirement as likely unconstitutional under the Fourth Amendment, which protects against unreasonable searches, or as likely illegal for failing to comply with laws governing the actions of federal agencies. While the San Antonio court halted the rule with a preliminary injunction for companies named in the lawsuit, the injunction was limited to the parties to that case and did not apply to Ashley’s or Andy’s businesses. So, Andy and Ashley filed a third case seeking broader relief. Today’s order grants relief to Ashley and Andy, but it also does not apply to other Texas businesses subject to the challenged order.

“I can breathe easier today knowing that I won’t be up until late in the night filling out paperwork and losing customers,” said Ashley. “There is no reason for the government to treat my regular customers making small dollar transactions as suspicious. I do hope that the court will quickly consider giving every business in Texas the same relief.”

Valuta is a money services business that helps customers exchange currency, cash checks, wire money worldwide, and get money orders. Payan’s provides check cashing. The reports mandated by the order require customers to provide detailed information including birthdates, Social Security or EIN numbers, and home addresses.

“Three separate courts have now found that the government likely violated the law when it issued this unprecedented financial surveillance order,” said IJ Senior Attorney Rob Johnson. “Because of the limited scope of relief, however, there are still businesses across the Southern Border that must continue to comply with the government’s unlawful order. We will continue fighting until this is enjoined everywhere, for everyone.”