SAN DIEGO—Today a San Diego federal court put a temporary halt to a financial surveillance rule that threatened Esperanza Gomez’s small business and intruded on the financial privacy of her customers. The order covers all Southern California businesses targeted by the surveillance. Esperanza teamed up with the Institute for Justice (IJ) to sue the Financial Crimes Enforcement Network (FinCEN) over its order requiring certain businesses in targeted ZIP codes to report all cash transactions above $200. The normal reporting requirement is for cash transactions over $10,000.
“I am happy and grateful for the judge’s decision,” said Esperanza. “This relieves the heavy weight that we were feeling, and this will allow us to continue to work for our customers and our community and will keep our business alive.”
For Esperanza, there are literally not enough hours in the day to complete the newly required paperwork, since it would take her 30 hours to file reports for the number of transactions she used to process daily. She is also losing customers, who are understandably reluctant to hand over personal information.
“The government’s order enlists these businesses to carry out an unprecedented and sweeping government surveillance system, and buried them in paperwork in the process,” said IJ Senior Attorney Rob Johnson. “We are grateful for this temporary relief and will continue to fight to make it permanent.”
The temporary restraining order issued today will expire on May 20. Before then, Esperanza will ask the court for a preliminary injunction that would stop the government from enforcing the surveillance order while the case moves forward.
This is the second federal court to issue a temporary restraining order against the rule. In Texas, IJ is representing Arnoldo Gonzalez, Jr., operator of a small MSB in Laredo, in an existing lawsuit filed by the Texas Association for Money Services Businesses. The association received a temporary restraining order preventing the government from enforcing the new requirements on its members on April 11.
Esperanza’s business provides check cashing, money transfers, and money orders—services that are vital to working class customers, many of whom do not have bank accounts. Customers cash pay checks, send money to family, and take out money orders for things like paying the rent. The 30 targeted ZIP codes are located in Texas and California—with many near El Paso and San Diego—and cover an area with a population of over a million people.
The lawsuit argues the order violates the Fourth Amendment’s prohibition of unreasonable searches. One of the foundational reasons for the creation of the amendment was to prevent the government from being able to acquire “general warrants”—wide-ranging warrants that failed to provide probable cause that a crime was being committed.