A group of money exchange businesses in Texas isn't required to collect the personal identification of some of its customers along the U.S. Mexico border — at least not for a couple more weeks.
A judge this week extended a temporary halt that was already in place on a new Trump administration rule requiring money changers in several border communities to report transactions between $200 and $10,000 to the federal government. The temporary reprieve applies only to the 10 money change businesses that challenged the rule in court and ends May 9.
After that time, there will be a hearing over whether to keep the new rule from taking effect as the case is heard, according to Jeff Rowes, who represents one of the businesses that sued.
The new rule, ordered by the U.S. Treasury Department last month, is part of the Trump administration's stated effort to crack down on illicit activity by drug cartels and other criminal gangs. But critics say it amounts to unnecessary surveillance of border communities and will hamper the ability for immigrants to send money back to their families, a practice called remittances.
It requires businesses that let customers exchange dollars and foreign currency or cash their checks to file reports of transactions between $200 and $10,000 with the federal government. The rule only covers 30 zip codes in counties along the border in Texas and California.
This week, a federal judge in San Diego also ordered a temporary halt on the surveillance rule for all California businesses targeted in the new rule.
Customers of money services businesses can exchange dollars or foreign currency, cash employment checks and send money abroad. The federal government already requires these businesses to report all cash transactions of $10,000 or more. Customers must provide their name, address, business or profession and social security number.
The companies suing argue that requiring them to collect that same sensitive information for amounts as low as $200, which makes up the bulk of their business, will deter customers afraid of sharing their social security number and negatively affect business. They say the new rule violates the Fourth Amendment, which prohibits the government from searching for evidence of a crime without probable cause.
They also argue the order violates the Fifth Amendment, which states that no person "shall be compelled in any criminal case to be a witness against himself."
Rowes said dropping the new rule will be "devastating to honest small businesses and their customers, and violates everyone's constitutional right to financial privacy."
Xavier Guerra is the president of Reynosa Casa de Cambio, Inc., one of the businesses suing to halt the new rule. He said some customers from other businesses that are not part of the lawsuit, and have therefore been forced to implement the new reporting requirement, have begun visiting his business instead.
Guerra said he has put up signs in Spanish and English notifying customers that his company was granted a reprieve from implementing the order, including the court case number so they can look it up.
He said he already records the information of transactions starting at $1,000 — an added security measure to prevent fraud — but does not send those reports to the federal government.
"People say, 'Whoa, why do you need my social? I'm going to Cancun, I want to have some cash," he said. "Imagine, $200?"
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