FinCEN Issues Order Imposing New Obligations on Money Services Businesses (MSBs) Operating Along the U.S. Southwest Border

The GTO applies broadly to MSBs located in one of the covered ZIP codes that engage in a “Covered Transaction,” defined as a deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such an MSB that involves a transaction in currency of more than $200 but no greater than $10,000. “Currency” is defined as “the coin and paper money of the United States or of any other country that is designated legal tender and that circulates and is customarily used and accepted as a medium of exchange in the country of issuance. Currency includes U.S. silver certificates, U.S. notes and Federal Reserve notes. Currency also includes official foreign bank notes that are customarily used and accepted as a medium of exchange in a foreign country.” The GTO requires the Covered Business that is engaged in the Covered Transaction to file a CTR, which under current BSA regulations are only triggered for cash or currency transactions above $10,000. (The current CTR filing requirements for currency transactions above $10,000 will also stay in place.)

The GTO has substantial breadth and, absent further clarification by FinCEN, appears to apply CTR obligations for a number of businesses that may not be accustomed to such filings, raising significant compliance challenges in light of the fast-approaching effective date of April 14, 2025. Covered MSBs would include, for example, retailers providing certain check-cashing services, sellers or providers of prepaid access, and various money transmitters that are exempt under state laws but are captured under the BSA definition of MSBs.

What Businesses Are Covered
All MSBs as defined by the regulations implementing the BSA are covered by the GTO if they engage in Covered Transactions in one or more of the 30 ZIP codes listed in the GTO. The definition of an MSB includes a person or business “wherever located doing business, whether or not on a regular basis or as an organized or licensed business concern, wholly or in substantial part within the United States… [which] includes but is not limited to maintenance of any agent, agency, branch, or office within the United States” doing business in one of seven listed capacities: (1) Dealer in foreign exchange; (2) Check casher; (3) Issuer or seller of traveler’s checks or money orders; (4) Provider of prepaid access; (5) Money transmitter; (6) the U.S. Postal Service; or (7) Seller of Prepaid Access. Each of these types of MSBs are defined in the BSA—the definitions of each of the types of MSB are somewhat complex, and a few trigger only at specified threshold amounts, while others have some limited exceptions to coverage.

Information That Must Be Collected and Reported, Identification Requirements and CTRs
The new GTO requires a great deal of information be obtained, such as the full name, address, date of birth, occupation/profession or business, details on the transactions, and method and information of verification of identity used. CTR forms are complex and may not be familiar to many types of businesses that are not currently required to file them. CTR forms currently have 49 questions to be completed, and the forms can run to multiple pages depending upon the number of parties involved. FinCEN also has detailed instructions for completion of a CTR, which MSBs will need to follow. For example, the instructions for completing the box in the CTR on “occupation, profession, or business” of the party conducting the transaction state: “If known, identify the occupation, profession or business that best describes the individual or entity in Part I (e.g., attorney, car dealer, carpenter, doctor, farmer, truck driver, etc.) Do not use nondescript terms such as a businessman, merchant, store owner (unless store’s name is provided) or if self-employed. If unemployed or retired are used, enter the regular or former occupation if known.”

CTR forms are to be filed by the Covered Entity electronically with FinCEN within 15 days following the day of the covered transaction. FinCEN states that although a party filing the CTR pursuant to the new GTO requirements will likely get a message indicating that the amount of the transactions to be reported is not above the usual CTR $10,000 filing threshold, the filing party should ignore this note and file as required by the new GTO. It is also important to note that these requirements apply, regardless of whether it is a consumer or a business or an individual on behalf of a business that is conducting the Covered Transaction at the MSB—the CTR form just requires more information if the person conducting the transaction is doing so on behalf of a third party.

Exemptions under State Money Transmitter or Other Laws Are Not Relevant.
It is also important to note that any state laws that might exempt any of these seven types of MSB from state licensure requirements are not relevant to the new GTO. Unless there is an exemption under the BSA itself, the GTO will cover the activities of these MSB entities and their agents that come within the scope of the MSB definitions.

Identify Verification Requirements
The GTO further requires the Covered Entity to verify the identity of individuals that conduct a reportable Covered Transaction for themselves or for another person (except for employees of armored car services under certain circumstances). These individuals must be identified by a means of an official document(s), which should be currently valid. On the CTR form, the Covered Entity must record specific identifying information.

Covered ZIP Codes
The GTO covers the following 30 ZIP codes in 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

Effective Date: April 14, 2025
The GTO will become effective beginning April 14, 2025. It will then be effective for 179 days thereafter. However, it is often the case that FinCEN will extend the effective date of a GTO for longer periods of time, and it can also expand or contract the list of covered ZIP codes or covered transactions at any time.

Documentation Retention
The documentation must be retained for at least five years in accordance with the GTO instructions. MSBs must make such records available to FinCEN or other law enforcement agencies upon request.

A Broad Scope of Entities Covered
The scope of entities covered by the new GTO is broad and likely will cover some businesses that have historically had only limited obligations under the BSA. For example:

• Any business, such as a retailer that performs check-cashing services involving $200 – $10,000 cash or currency in any of the 30 ZIP codes will be covered if it accepts checks (as defined in the Uniform Commercial Code), or monetary instruments (as defined in the BSA) in return for currency or a combination of currency and any other monetary instruments or other instruments, in an amount greater than $1,000 for any person on any day in one or more transactions. Unless otherwise clarified by FinCEN, such a “Check Cashier” will be subject to the new CTR reporting rule for any check-cashing activity paid in cash or currency in an amount between $200 – $10,000. In other words, the BSA’s definition of Check Casher appears to trigger if the Check Casher cashes a check for more than $1,000 for any person on any day—and, if it does, then it will also be subject to the new GTO reporting and identification transactions involving cash or currency of $200 – $10,000 in any of the covered ZIP codes.
• An entity that is a Provider or Seller of Prepaid Access (as the terms are defined in the BSA) that performs Covered Transactions in any of the 30 ZIP codes, as well as its agents performing such MSB services in the covered ZIP codes, will also be subject to the GTO’s requirements.
• Any MSB that is a money transmitter or its agents performing a Covered Transaction within the 30 ZIP codes will also be covered, and it is important to note the broad definition of a “money transmitter” in the BSA.^[1]

Challenges Posed by Information to Be Captured and Reported
It seems likely that some or many MSBs and their agents providing MSB services, where any of the services are performed within any of the 30 ZIP codes identified in the GTO, will need to capture the required information and identification information at the point-of-sale. Implementing such new policies, procedures, training, reporting, recordkeeping, etc. is likely to be challenging, especially for any Covered Businesses that are not currently subject to (and used to) filing CTRs and capturing the requisite information. Implementing all the required processes in less than 30 days—compliance is required starting on April 14, 2025—could prove challenging, as well.

Additional Obligations/Notices
The GTO states a “Covered Business must supervise, and is responsible for, compliance by each of its officers, directors, employees, and agents with the terms of this Order. The Covered Business must transmit this Order to each of its agents located in the Covered Geographic Area. The Covered Business must also transmit this Order to its Chief Executive Officer or other similarly acting manager.”

Penalties for Noncompliance
A Covered Business, and any of its officers, directors, employees, and agents, may be liable, without limitation, for civil or criminal penalties for violating any of the terms of the GTO.

The new GTO is broad in terms of the types of businesses that come within the definition of Covered Entity. For Covered Entities that are not familiar with completing CTRs, it will require some becoming familiar with such filings and also determinations of what processes and procedures they may need to implement to comply. As the GTO comes into effect on April 14, 2025, there is very limited time for Covered Entities to set up procedures for compliance.

^{[1] For purposes of the BSA, it is important to note that “financial institution” is defined to, among other things, include a “ money services business” as defined in 31 CFR 1010.100(ff).}