FinCEN’s Southwest Border Geographic Targeting Order (GTO): What Credit Unions Need to Know
On March 11, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Geographic Targeting Order (GTO) which requires certain money services businesses (MSBs) near the southwest border in California and Texas to file Currency Transaction Reports (CTRs) at a $200 threshold. The GTO applies specifically to MSBs operating in 30 zip codes (more on that below) across California and Texas. In this release, FinCEN states that the purpose of the GTO is “to further combat the illicit activities and money laundering of Mexico-based cartels and other criminal actors along the southwest border of the United States.”
The Order notes that the “terms of this Order are effective beginning April 14, 2025 and ending on September 9, 2025.”
As mentioned, the GTO requires MSBs in certain targeted zip codes to report cash transactions that exceed $200. This is a much lower threshold than the typical $10,000 CTR threshold.
The GTO applies to MSBs which are defined in section 1010.100(ff). However, a much shorter description of an MSB can be found here: Money Services Business Definition | FinCEN.gov. Per FinCEN:
“The term "money services business" includes any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities:
(1) Currency dealer or exchanger.
(2) Check casher.
(3) Issuer of traveler's checks, money orders or stored value.
(4) Seller or redeemer of traveler's checks, money orders or stored value.
(5) Money transmitter.
(6) U.S. Postal Service.”
FinCEN goes on to note that “[a]n activity threshold of greater than $1,000 per person per day in one or more transactions applies to the definitions of: currency dealer or exchanger; check casher; issuer of traveler's checks, money orders or stored value; and seller or redeemer of travelers' checks, money orders or stored value.” Meanwhile, “[n]o activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.”
However, it’s important to note that an MSB does not include the following:
• “A bank, as that term is defined in 31 CFR 1010.100(d) (formerly 31 CFR 103.11(c)), or
• A person registered with, and regulated or examined by, the Securities and Exchange Commission or the Commodity Futures Trading Commission.”
The definition of “bank” includes “[a] credit union organized under the law of any State or of the United States.” As such, credit unions are not considered MSBs.
You may be wondering, if this only applies to MSBs, how does this relate to credit unions? I’m glad you asked! The GTO is important to keep in mind since credit unions may serve MSBs and must have internal controls in place to properly manage the additional BSA-related risk. As this NCUA Newsroom post points out, “the nature of MSBs' operations pose increased risk for money laundering. As a result, credit unions must have a clear understanding of an MSB's operations to assess and mitigate any potential risks. Credit unions must also perform ongoing due diligence.”
Additionally, if your credit union is located in, or is near, one of the listed zip codes, it may be helpful to stay vigilant. Credit unions in these areas may be more likely to face increased exposure to suspicious activity as individuals seeking to avoid detection due to the GTO may attempt to use credit unions for similar activities.
So, which zip codes are impacted by this order? Per FinCEN, “[t]he order covers the following ZIP codes across seven counties in 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”
While credit unions are not subject to the lower CTR threshold of $200, they must still continue to file CTRs for cash transactions greater than $10,000. However, credit unions in and around the specified zip codes may want to be extra attentive to any unusual cash transactions and structuring activities.
Per the release, questions about the GTO can be sent through FinCEN’s website at www.fincen.gov/contact.
Helpful information can also be found in these FAQs from FinCEN: https://www.fincen.gov/sites/default/files/shared/SWB-MSB-GTO-Order-FINAL508.pdf
