THE $200 BANK RULE
In early 2025, the U.S. Treasury Department introduced a new financial reporting requirement that has garnered widespread attention: in certain areas along the southwest border, banks and other financial services businesses are now required to report cash transactions of $200 or more — a dramatic departure from the long-standing federal rule that required reporting only when cash transactions exceeded $10,000. This “$200 bank rule” isn’t a universal change yet, but it marks a significant shift in how financial activity is monitored and reported in targeted regions.
What the $200 Rule Actually Is
Under a Geographic Targeting Order (GTO) issued by the Treasury’s Financial Crimes Enforcement Network (FinCEN), certain financial institutions and businesses classified as money services businesses (MSBs) — such as check-cashing services, currency exchanges, money transmitters, and some bank branches — must file a Currency Transaction Report (CTR) with FinCEN for cash transactions of $200 or more. This applies in specific ZIP codes along the California and Texas border with Mexico.
• Previous standard: The federal requirement under the Bank Secrecy Act and related regulations has been to file a CTR for individual cash transactions of $10,000 or more in a single day.
• New standard (in affected areas): Transactions of $200 and above must be reported.
• This change does not alter Suspicious Activity Report (SAR) obligations; banks must still file SARs when appropriate.
Why the Rule Was Created
According to FinCEN and Treasury officials, the purpose of the rule is to combat money laundering and illicit activity along the U.S.–Mexico border. The agency has cited concerns about the potential infiltration of cartel-related and other criminal funds into the U.S. financial system. By lowering the reporting threshold, regulators hope to capture and flag smaller cash flows that could be part of broader illicit finance networks.
Where It Applies
The rule is geographically limited. It currently applies in approximately 30 ZIP codes in border regions of California and Texas — primarily areas adjacent to counties along the U.S.–Mexico border. The focus is on locations where regulators believe cash-intensive criminal activity may be more prevalent.
It’s important to note that outside of these designated ZIP codes, banks still follow the traditional $10,000 threshold for CTRs.
What Financial Institutions Must Do
Financial institutions and MSBs operating in the affected areas must:
• Collect more detailed customer information when processing cash transactions of $200 or more.
• File CTRs for these smaller transactions with FinCEN.
• Maintain compliance and record-keeping standards that support federal anti-money-laundering (AML) initiatives.
These requirements could involve updating internal compliance systems, retraining staff on reporting criteria, and enhancing customer identification processes.
Impact on Everyday Consumers
For most customers outside these border ZIP codes, day-to-day banking won’t change — cash deposits, withdrawals, and exchanges below $10,000 won’t typically trigger a report to FinCEN.
In the affected areas, however, individuals conducting cash transactions of $200 or more may be subject to increased reporting. This does not mean the transactions are illegal or that banks are penalizing customers; rather, the government is capturing more detailed data on these cash flows for national security and financial crime surveillance.
What It Does Not Change
• The broader requirement to report cash transactions of $10,000 or more still exists nationwide.
• Tax reporting and obligations remain unchanged; this is a financial reporting rule, not a tax form requirement.
• The rule does not criminalize cash use or set new taxes.
Looking Ahead In Life
While the rule remains geographically targeted for now, the publicity around it has stirred debate about financial privacy, surveillance, and the future of cash usage in the U.S. banking system. Stakeholders — including consumer advocates, financial institutions, and compliance professionals — are watching how the rule functions in practice and whether similar measures might arise elsewhere.
Conclusion
The new $200 bank rule represents a notable shift in federal financial reporting policy — narrowing the threshold for cash transaction reporting in specific border communities as part of a strategy to disrupt illicit financial activity. As with any major regulatory adjustment, it underscores the evolving balance between financial transparency, privacy, and law enforcement objectives.
