A federal appeals court upheld a preliminary injunction blocking a Treasury rule requiring money service…
Novedades Y Servicios, Inc. v. Financial Crimes Enforcement Network
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A federal appeals court upheld a preliminary injunction blocking a Treasury rule requiring money service businesses near the southwest border to report cash transactions as low as $200.
Why it matters
The Ninth Circuit affirmed a district court's preliminary injunction stopping the government from enforcing a Geographic Targeting Order that lowered the cash transaction reporting threshold from $10,000 to $200 for money service businesses in parts of Texas and California near the southwest border. The court found the businesses were likely to succeed in showing the order was really a rule in disguise, requiring public notice and comment before taking effect, and that it was adopted without considering the costs imposed on regulated businesses. The court also found the affected business faced a realistic threat to its survival, justifying the injunction.
Who it affects
- Such as check cashers
- Wire transfer companies
- California
- FinCEN
What happens next
Current
Decision issued Jul 13, 2026
Published opinion
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- Decision issued Jul 13, 2026Published opinion
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Jul 13, 2026 · Published opinion
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DEEPER READ
The case arose from a March 2025 order issued by the Financial Crimes Enforcement Network, a bureau within the Treasury Department, requiring all money service businesses in 30 ZIP codes along the southwest border to file currency transaction reports for any cash transaction between $200 and $10,000. This dramatically lowered the longstanding $10,000 reporting threshold. Novedades y Servicios, a small money service business, and its owner sued to block the order, arguing it violated federal administrative law. The Ninth Circuit addressed whether a preliminary injunction blocking the order was appropriate. The court found the business was likely to succeed on three legal arguments under the Administrative Procedure Act. First, the court reasoned the order was actually a rule rather than a targeted order because it applied to all unnamed businesses across a broad geographic area covering more than one million people, rested on general policy concerns rather than specific disputed facts, and resolved policy questions rather than a dispute between particular parties. Second, because it was effectively a rule, the government was required to go through a public notice and comment process before issuing it, which it did not do. Third, the court found the order was likely adopted in an arbitrary and capricious manner because the government entirely failed to consider the compliance costs it would impose on regulated businesses. The court also upheld the finding of irreparable harm to Novedades. During the single week the order was in effect, the business lost 50 to 60 percent of the customers to whom its owner explained the new reporting requirements. Customers expressed concern that providing personal information would mark them as criminals, and some said they would take their business to nearby unaffected locations. The court also noted that compliance would require an estimated fourteen or more additional hours of reporting work per day and the hiring of a full-time employee the business said it could not afford, posing what the court called a threat of extinction to the small business. Judge Lee dissented, arguing that the business had not shown irreparable harm sufficient to justify the extraordinary relief of a preliminary injunction. In his view, the district court relied too heavily on general assertions of financial burden rather than a thorough analysis of harm, and he would have sent the case back to the district court to conduct that analysis before granting any injunction. The ruling keeps the preliminary injunction in place, meaning the government cannot enforce the lower reporting threshold in the Southern District of California while the case continues. It does not resolve the case permanently but signals that courts will closely examine whether agencies follow proper rulemaking procedures before imposing broad reporting obligations on businesses.
CITATION AND RECORD
Record source: CourtListener
FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT NOVEDADES Y SERVICIOS, No. 25-4238 INC.; ESPERANZA GOMEZ D.C. No. ESCOBAR, 3:25-cv-00886- JLS-DDL Plaintiffs - Appellees, v. OPINION FINANCIAL CRIMES ENFORCEMENT NETWORK; ANDREA GACKI, in her official capacity as Director of the Financial Crimes Enforcement Network; UNITED STATES DEPARTMENT OF THE TREASURY; SCOTT BESSENT, in his official capacity as Secretary of the Treasury; TODD BLANCHE, Acting Attorney General, in his official capacity as the Acting Attorney General of the United States, Defendants - Appellants. Appeal from the United States District Court for the Southern District of California Janis L. Sammartino, District Judge, Presiding 2 NOVEDADES Y SERVICIOS, INC. V. FINCEN Argued and Submitted February 2, 2026 Pasadena, California Filed July 13, 2026 Before: Kenneth K. Lee, Lucy H. Koh, and Ana de Alba, Circuit Judges. Opinion by Judge Koh; Dissent by Judge Lee SUMMARY * Preliminary Injunction / Currency Transaction Reports The panel affirmed the district court’s preliminary injunction in favor of Novedades y Servicios, Inc., a money service business, and its owner enjoining the government from enforcing a Geographic Targeting Order (“GTO”) that requires all money services businesses in an area along the southwest border to file currency transaction reports for any cash transaction between $200 and $10,000—a reduction from the longstanding $10,000 reporting threshold. The Currency and Foreign Transactions Reporting Act (“Bank Secrecy Act”) authorizes the Treasury Secretary to require domestic financial institutions to file currency transaction reports with the Financial Crimes Enforcement Network (“FinCEN”), a bureau within the Treasury * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. NOVEDADES Y SERVICIOS, INC. V. FINCEN 3 Department. In 1988, Congress enacted an additional provision within the Bank Secrecy Act, authorizing the Secretary to require certain reports by “order,” rather than by “regulation” (“Section 5326”), in response to concerns that launderers were dealing in transactions below the $10,000 reporting amount. Orders issued under Section 5326 are commonly referred to as GTOs. In March 2025, FinCEN issued a Border GTO requiring all money services businesses located in 30 specified ZIP codes within five Texas counties and two California counties along the southwest border of the United States to file currency transaction reports for any transaction of more than $200 and less than $10,000. Addressing the elements required to obtain a preliminary injunction, the panel held that plaintiffs demonstrated a likelihood of success on the merits of each of their following claims under the Administrative Procedure Act (“APA”). Specifically, the panel held that (1) the Border GTO was likely a rule, not an order, under the APA because the Border GTO applies to all unnamed and unspecified money services businesses in 30 ZIP codes with a total population of over one million instead of specific businesses; rests on general facts rather than the adjudication of a particular set of disputed facts; and determines policy issues rather than resolving a dispute between particular parties; (2) FinCEN was required to conduct notice and comment rulemaking before issuing the Border GTO because it was a de facto rule; and (3) the Border GTO was likely adopted in an arbitrary and capricious manner because FinCEN entirely failed to consider the cost of compliance to regulated parties, an important aspect of the problem. The panel held that the district court did not clearly err in finding that Novedades demonstrated a likelihood of 4 NOVEDADES Y SERVICIOS, INC. V. FINCEN irreparable harm because it faced a “threat of extinction” and the loss of its customers and goodwill. Novedades, which typically maintains one person on duty at a time, estimated that compliance would require an additional fourteen or more hours of reporting work per day and the hiring of a full- time employee it cannot afford. Novedades estimated the time it would take to comply with the Border GTO based on a conservative estimate that each currency transaction report would require around 25 minutes to complete, far below the currency transaction report’s estimate of 40 minutes. Additionally, during the single week the Border GTO was in effect, Novedades lost 50-60% of the customers in the store to whom its owner explained the new reporting requirements, as customers expressed skepticism and fear that providing their personal information would place them on a list of criminals or cause them to be mistaken for criminals and also stated their intent to take their business to money services businesses in unaffected ZIP codes, including a money services business that is only a 5 minute drive from Novedades. The panel held that the district court did not abuse its discretion in determining that the balance of equities and public interest favored plaintiffs when weighing the concrete threat the Border GTO posed to Novedades’s existence and its owner’s livelihood against the government’s speculative assertions that the Border GTO will keep the public safer. Finally, the panel held that the district court did not abuse its discretion in limiting the scope of the preliminary injunction to the Southern District of California. Dissenting, Judge Lee would hold that plaintiffs have not shown irreparable harm to merit the extraordinary remedy of a preliminary injunction. The district court erred by NOVEDADES Y SERVICIOS, INC. V. FINCEN 5 assuming irreparable harm largely based on blanket assertions of financial burden. He would remand for the district court to further analyze irreparable harm before a preliminary injunction is granted. COUNSEL Robert E. Johnson (argued), Institute for Justice, Shaker Heights, Ohio; Andrew K. Ward and Elizabeth Sanz, Institute for Justice, Arlington, Virginia; Jeffrey Rowes, Institute for Justice, Austin, Texas; Katrin Marquez, Institute for Justice, Miami, Florida; Nilay U. Vora and Jeffrey A. Atteberry, Vora Law Firm PC, Santa Monica, California; for Plaintiffs-Appellees. Simon G. Jerome (argued) and Sharon Swingle, Attorneys, Appellate Staff; Brett A. Shumate, Assistant Attorney General; Civil Division, United States Department of Justice, Washington, D.C.; Stephanie A. Sotomayor, Assistant United States Attorney; Adam Gordon, United States Attorney; Office of the United States Attorney, United States Department of Justice, San Diego, California; for Defendants-Appellants. Daniel C. Silva and Ava Sadeghi, Buchalter APC, San Diego, California, for Amici Curiae MSBA, Inc. and INFiN Inc. 6 NOVEDADES Y SERVICIOS, INC. V. FINCEN OPINION KOH, Circuit Judge: On March 14, 2025, the Treasury Department’s Financial Crimes Enforcement Network issued a Geographic Targeting Order that requires all money services businesses in an area along the southwest border to file currency transaction reports for any cash transaction between $200 and $10,000—a reduction from the longstanding $10,000 reporting threshold. The covered area consists of 30 ZIP codes spread among five Texas counties and two California counties and covers a population of over one million people. The ZIP codes are non-contiguous and surrounded by non-covered Z
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