FinCEN Announces “Data-Driven Border Operation to Address Potential Money Laundering”

On December 22, 2025, Secretary of the Treasury Scott Bessent announced that the Financial Crimes Enforcement Network (FinCEN) will continue to target Money Services Businesses (MSBs), financial institutions, and cash-intensive businesses operating along the southwest border in an effort to make government “more modern, effective, and efficient.”[1] FinCEN intends to achieve these goals by increasing its use and application of “high-performance data processing to uncover illicit networks and protect the U.S. financial system from evolving threats” like money laundering, transnational organized crime, anti-money laundering (AML) compliance failures, and human trafficking.[2]

FinCEN’s December 2025 announcement follows nearly a year of an “all-of-government” approach to investigating, disrupting, and prosecuting money laundering along the southwest border between Mexico and the US. As Secretary Bessent noted in the announcement, “[T]he Treasury Department is utilizing all tools to stop terrorist cartels, drug traffickers, and human smugglers. This sweeping operation will help root out potential cartel-related money laundering from the U.S. financial system.”

In 2025, FinCEN’s data-driven approach resulted in a variety of actions by the Treasury Department and its law enforcement partners. These actions include the issuance of notices of investigation, examination referrals, and compliance outreach letters to MSBs. According to FinCEN’s December 2025 announcement, the federal government has a simple but ambitious intent: “to secure the border and to pursue the total elimination of Cartels and Transnational Criminal Organizations.” FinCEN and the Treasury Department have already connected with the Homeland Security Task Force in order to coordinate the effective use and analysis of the significant amount of Bank Secrecy Act (BSA) reports that FinCEN gathers and makes available to all levels of federal, state, and municipal government.

MSBs, and all financial institutions that interact with MSBs or other businesses engaging in significant cross-border transactions between Mexico and the US should prepare for additional scrutiny in 2026. The federal government, led by FinCEN, has made clear that MSBs sit at the heart of its law enforcement goals in the near and long-term future. Indeed, the December 2025 announcement by Secretary Bessent asserts that AML failures connected with MSBs and involving Mexico-US transactions, “threaten national security.”

This initiative is particularly notable in light of FinCEN’s deployment of new investigative technologies to scrutinize financial institutions, their transactions, their employees and owners, and their customers and business partners. This announcement makes ongoing compliance, particularly the continuous review and updating of every MSBs’ AML policies and procedures, a non-negotiable duty for 2026 and beyond.

FinCEN Targeted MSBs along the Southwest Border throughout 2025

Beginning in March 2025, FinCEN identified MSBs operating near the southern border of California and Texas as part of a broader AML initiative to disrupt drug trafficking and human smuggling organizations.[3] FinCEN issued a “Geographic Targeting Order” (GTO) imposing heightened recordkeeping and reporting requirements on certain MSBs in defined areas along the Southwest border.[4] The GTO required covered MSBs to report Currency Transaction Reports (CTRs) to FinCEN at a $200 threshold for cash transactions, well below the standard $10,000 threshold.

Injunctions imposed by federal courts in California and Texas prevented FinCEN from enforcing the GTO (including litigation where Buchalter attorneys successfully represented MSB trade associations). In response, FinCEN issued an amendment to the GTO in September 2025 that increased the CTR reporting threshold from $200 to $1,000.[5]

FinCEN issued its MSB GTO partially in response to the President’s January 20, 2025, executive order designating several cartels and transnational criminal organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists.[6] That designation materially altered the enforcement landscape by elevating cartel-related financial activity from a traditional AML concern to a national security priority. As a result, FinCEN’s March GTO explicitly framed MSB oversight as a tool to disrupt terrorist financing, not merely money laundering.

The September 2025 GTO amendment first emphasized FinCEN’s commitment to employing  advanced data analytics to identify suspicious activity patterns across multiple MSBs. Notably, the September modification signaled that geographic targeting should not be viewed as a temporary or isolated enforcement tool, but rather as a scalable model that FinCEN could replicate in other regions and apply to other financial institutions, businesses, and transactions.

December 2025 Developments and Enforcement Signals

FinCEN’s December 2025 announcement confirmed that the Treasury Department does not view the GTO as a mere information-gathering exercise. Instead, FinCEN is signaling that it will actively use the information gathered from the GTO to identify systemic compliance failures by financial institutions, potential violations of the BSA, and other financial crimes. The statements in the December 2025 announcement underscore FinCEN’s increasing reliance on technology-driven analysis and inter-agency coordination. Treasury officials appeared poised to use data collected under the GTO to support investigations outside the original target zones, raising the prospect that MSBs nationwide could face scrutiny based on transaction patterns rather than physical location alone.

FinCEN identified several categories of AML deficiencies by MSBs, including failures to:

• develop, implement, and maintain effective, risk-based AML programs;
• verify customer identification;
• monitor transactions for suspicious activity and file timely Suspicious Activity Reports (SARs);
• file timely CTRs for transactions exceeding reporting thresholds; and
• ensure adequate oversight of agents, branches, and third-party service providers.

All of these violations carry substantial civil and criminal penalties. FinCEN’s enforcement actions, and those of its law enforcement and regulatory partners, developed from more than 1 million CTRs and 87,000 SARs, which FinCEN processed through its new data-analysis tools. FinCEN has not released specifics regarding the systems or methodologies employed, other than describing them as a first-of-their-kind, high-performance, data-driven enforcement approach. As one of the largest financial data repositories, FinCEN collects millions of SARs, CTRs, Foreign Bank Account Reports (FBARs), Corporate Transparency Act reports (for foreign reporting companies only), and other financial filings. Only time will tell the full impact of this modernization mandate.

The BSA Enforcement and Regulatory Landscape for 2026

All financial institutions, and particularly MSBs, should expect FinCEN—and, indeed, all federal financial, regulatory, and criminal investigative agencies—to pursue enforcement-driven compliance. Beyond reviewing and updating AML policies, procedures, and internal controls to ensure an MSB fully adheres to the BSA, financial institutions and businesses should provide their employees, agents, and board with hyper-focused training and enforcement updates.

Although no business wants to receive notice of an inquiry or target letter from a law enforcement agency or a regulator, preparing in advance for potential outreach from any government entity focused on AML compliance is possible through strategic attention to detail.

[1] A Money Services Business is a financial institution defined under 31 C.F.R. § 1010.100(ff) as a non-bank entity that (1) dealers in foreign exchange; (2) check cashers; (3) issuers or sellers of traveler’s checks or money orders; (4) providers of prepaid access; (5) money transmitters; (6) U.S. Postal Service; or (7) sellers of prepaid access and are regulated under the Bank Secrecy Act (BSA) and related AML laws.

[2] FinCEN Announces Data-Driven Border Operation to Address Potential Money Laundering, FinCEN Press Release (Dec. 22, 2025), available at https://home.treasury.gov/news/press-releases/sb0344

[3] Treasury’s Financial Crimes Enforcement Network (FinCEN) Issues Southwest Border Geographic Targeting Order, FinCEN Press Release (Mar. 11, 2025), available at https://home.treasury.gov/news/press-releases/sb0048 and see also FinCEN Issues Modified Southwest Border Geographic Targeting Order, FinCEN Press Release (Sep. 8, 2025), available at https://www.fincen.gov/news/news-releases/fincen-issues-modified-southwest-border-geographic-targeting-order

[4] See Issuance of a Geographic Targeting Order Imposing Additional Recordkeeping and Reporting Requirements on Certain Money Services Businesses Along the  Southwest Border, 90 Fed. Reg. 12106 (Mar. 14, 2025), available at https://www.federalregister.gov/documents/2025/03/14/2025-04099/issuance-of-a-geographic-targeting-order-imposing-additional-recordkeeping-and-reporting (The 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.)

[5] See Geographic Targeting Order Imposing Recordkeeping and Reporting Requirements on Certain Money Services Businesses Along the Southwest Border, 90 Fed. Reg. 43557 (Sep. 10, 2025,) available at https://www.federalregister.gov/documents/2025/09/10/2025-17371/geographic-targeting-order-imposing-recordkeeping-and-reporting-requirements-on-certain-money

[6] Executive Order 14157, Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists (Jan. 20, 2025), available at https://www.federalregister.gov/documents/2025/01/29/2025-02004/designating-cartels-and-other-organizations-asforeign-terrorist-organizations-and-specially.

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