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AML/CFT BSA Rules and Regulation Customer Due Diligence Financial Crime

FinCEN GTO for Southwest border: What this means for banks and credit unions

Terri Luttrell, CAMS-Audit, CFCS
April 28, 2025
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FinCEN GTO for the Southwest border

FinCEN implemented a new Geographic Targeting Order requiring money services businesses in 30 zip codes near the U.S. Southwest border to file Currency Transaction Reports for cash transactions between $200 and $10,000. It is designed to curb illicit cash flows linked to drug trafficking and transnational criminal activity—two of FinCEN’s national AML/CFT priorities.

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FinCEN GTO for Southwest border: What this means for banks and credit unions

The Southwest border between Mexico and the United States has long been a hotbed of illicit narcotic activity. In an effort to curtail this flow of dirty money coming into the U.S. banking system, on April 14, 2025, the Financial Crimes Enforcement Network (FinCEN) implemented a new Geographic Targeting Order (GTO) requiring money services businesses (MSBs) in 30 ZIP codes near the U.S. Southwest border to file Currency Transaction Reports (CTRs) for cash transactions between $200 and $10,000. This new threshold is significantly lower than the standard $10,000 CTR requirement. It is designed to curb illicit cash flows linked to drug trafficking and transnational criminal activity—two of FinCEN’s national AML/CFT priorities.

While this GTO does not directly apply to banks or credit unions, it does impact MSB customers and members. It also presents significant implications for traditional financial institutions that serve or monitor those entities. Understanding the operational effects of the FinCEN GTO for Southwest border areas is essential, especially for those in AML/CFT compliance or risk oversight roles.

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Why FinCEN issued this GTO

Although deaths due to drug overdoses have declined slightly in the U.S., the opioid epidemic continues to be a significant issue, with an estimated 87,000 deaths reported in 2024. The GTO supports a broader federal initiative to combat the flow of fentanyl and other narcotics into the U.S.

In early 2025, the Trump Administration issued Executive Order 14157, designating major drug cartels as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs). This designation gives law enforcement and financial regulators additional tools to block access to the U.S. financial system and go hard after these dangerous organizations.

FinCEN’s latest GTO reinforces this approach by lowering the cash transaction reporting threshold to detect small-dollar activity, which is often used to structure or obscure illicit money flows.

Geographic targeting order requirements for Southwestern counties

The FinCEN GTO applies to MSBs located in 30 ZIP codes across California (including Imperial, San Diego, and Cameron counties) and Texas (including El Paso, Hidalgo, Maverick, and Webb counties).

Covered MSBs must:

  • File a CTR for any cash transaction between $200 and $10,000, within the 15-day deadline.
  • Include the keyword “MSB0325GTO” in Field 45 of Part IV of the CTR.
  • Maintain records of these transactions for five years after the GTO expires.

This latest geographic targeting order does not replace existing obligations, so covered MSBs must still:

  • File standard CTRs for transactions over $10,000.
  • Submit Suspicious Activity Reports (SARs) for any transaction involving or aggregating to $2,000 or more when appropriate.
  • Consider voluntary SARs for transactions structured to avoid the $200 threshold.

 

 

What it means for banks and credit unions

While the FinCEN GTO for Southwest border regions doesn’t impose new filing requirements on financial institutions, banks that serve MSBs, particularly in or near the affected areas, should take proactive steps. Here are some recommendations for making sure you truly know your customers:

  1. Understand customer exposure

Review your customer base to determine whether you serve MSBs that operate in the listed ZIP codes. This includes businesses such as check cashers, money transmitters, or prepaid providers that may now fall under the GTO.

  1. Refresh due diligence efforts

The GTO offers a timely reason to review enhanced due diligence (EDD) measures for MSBs, particularly in high-risk geographies. Ensure you have clear records of where MSBs operate and how they comply with regulatory requirements.

  1. Monitor for compliance challenges

Be aware of the operational burdens your MSB clients now face. Some may struggle to adjust systems or train staff for lower-dollar CTR filings. Monitoring for unusual gaps in transaction reporting or increased risk behaviors can help banks detect when an MSB may be failing to comply.

  1. Prepare for the examiner's questions

Regulators may ask about your institution’s exposure to MSBs affected by the GTO. Being able to demonstrate awareness of which clients are impacted—and any monitoring enhancements you’ve implemented—can strengthen your overall compliance posture.

  1. Watch for structured activity

Even outside the affected ZIP codes, small-dollar cash transactions designed to avoid reporting requirements may increase. Ensure your transaction monitoring systems are tuned to flag behavior that could indicate structuring around the $200 threshold.

A strategic opportunity for financial institutions

The FinCEN GTO for Southwest border regions reflects a broader expectation that financial institutions, while not directly responsible for these new filings, will remain engaged partners in detecting and preventing financial crime. This is an opportunity for AML/CFT Officers to strengthen MSB onboarding and monitoring practices, align program efforts with national priorities, and collaborate with MSB clients on education and risk management.

Duration of the GTO and what’s next

The GTO is effective through Sept.  9, 2025, and may be renewed depending on evolving enforcement priorities. During this period, MSBs in the covered regions will face heightened regulatory scrutiny and increased reporting burdens, adding complexity to their operations and, by extension, to the institutions that serve them. Financial institutions that bank these MSBs should take steps now to validate their risk assessments, monitoring strategies, and due diligence procedures. If your team could benefit from additional support, Abrigo Advisory Services offers deep experience in helping institutions assess, document, and strengthen MSB oversight programs, ensuring your bank remains confident and compliant in a changing regulatory environment.

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About the Author

Terri Luttrell, CAMS-Audit, CFCS

Compliance and Engagement Director
Terri Luttrell is a seasoned AML professional and former director and AML/OFAC officer with over 20 years in the banking industry, working both in medium and large community and commercial banks ranging from $2 billion to $330 billion in asset size.

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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