Background
FinCEN issued a Geographic Targeting Order requiring money services businesses in thirty ZIP codes along the southwest border to report cash transactions between two hundred dollars and ten thousand dollars. Plaintiffs, a small money services business and its owner, sought to enjoin enforcement, arguing the order violated the Administrative Procedure Act and the Fourth Amendment. The district court granted a preliminary injunction, finding the plaintiffs likely to succeed on their Administrative Procedure Act claims and facing irreparable harm.
The court’s reasoning
The panel held that the Border Geographic Targeting Order was a rule, not an order, because it applied to unnamed and unspecified persons, rested on general facts, and determined policy issues. Consequently, FinCEN was required to conduct notice and comment rulemaking under the Administrative Procedure Act. The court further found the order arbitrary and capricious because FinCEN entirely failed to consider the cost of compliance to regulated parties, as the administrative record contained no clear indication that the agency considered such costs prior to issuance.
The dissent
What it means going forward
The ruling prevents the enforcement of the specific Border Geographic Targeting Order in the Southern District of California, protecting small money services businesses from the immediate burden of reporting transactions between two hundred and ten thousand dollars.