The Cato Institute, a Washington-based libertarian think tank, has criticized FinCEN’s decision to lower the threshold for currency transaction reports from $10,000 to $200 for U.S. citizens living in 30 ZIP codes in California and Texas, calling it a move in the wrong direction. According to the think tank, lowering this threshold will subject a million Americans to a new level of financial surveillance.

In a recent blog post, the Cato Institute described FinCEN’s announcement as disappointing but not surprising. It noted that the U.S. president’s decision to designate cartels as terrorists in February signaled that the Trump administration would go to great lengths in its fight against criminals operating along the U.S.-Mexico border.

Under its geographical targeting order (GTO) unveiled on March 11, FinCEN mandated that all money services businesses (MSBs) located in 30 ZIP codes across California and Texas near the southwest border file currency transaction reports (CTRs) at a $200 threshold. U.S. Secretary of the Treasury Scott Bessent said the GTO is intended to counter criminals and minimize risks posed to U.S. financial systems by Mexican drug cartels and other criminal organizations.

While FinCEN has framed the GTO as a tool for combating cartels and criminal gangs, the Cato Institute argues that lowering the threshold defies expectations.

“At the very least, many people agree that the amount should be adjusted for inflation. Whether you base that adjustment on the reporting done under the Trading with the Enemy Act in 1945, the enactment of the Bank Secrecy Act in 1970, or the Treasury’s currency transaction report regulation in 1972, it’s clear that this reporting regime has gotten out of hand,” the think tank said.

Although the think tank agrees with the Trump administration on the need to combat cartels and organized crime, it contends that this cannot justify stripping away Americans’ rights. The Cato Institute also suggested that the Trump administration’s actions were more extreme than those of the Biden administration, which had proposed lowering the threshold to $600.

Quoting a warning issued by Fight for the Future in 2023, the Cato Institute asserts that the Trump administration may have allowed criminals to force it into abandoning the Constitution.

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