Many people do business in cash. They pay rent, go shopping, or wire money to relatives without government surveillance. But now, under a new federal directive targeting neighborhoods near the Southern Border, different rules apply.

Esperanza Gomez owns Novedades y Servicios, a small storefront offering entirely legal and legitimate money services to people who use cash. Normally, anytime a customer wants to do anything over $10,000—like cash a check, get a money order, or wire money—businesses that help them must record sensitive personal information, including the customer’s Social Security number, and report it to the federal government.

But starting on April 14, 2025, the government lowered that threshold to just $200. Previously, Gomez never had to make these reports because her customers’ transactions are always under $10,000. But because of the new rule, she suddenly must report nearly every transaction to the feds.

Many customers do not want the government to get a report every time they cash a check to buy groceries, diapers, or clothes at the stores across the way from Gomez’s shop. “My customers are honest people who are trying to live their lives,” she says, “Many do not have bank accounts, and they need these services. They don’t understand why this is required.”

What’s more, the new law only applies to 20 ZIP codes in Texas and 10 in California across Imperial and San Diego Counties. Everywhere else, the federal reporting standard remains $10,000. Actual criminals—if they really need to move money in $200 increments—can just go to a San Diego ZIP code not targeted by the new rule or head north toward Orange and Riverside counties.

Left behind will be small-business owners like Gomez and her customers who lack mobility.

The burden of compliance with the new law threatens to drive Gomez out of business. She will need more hours than she has in the day to complete the required paperwork. Penalties for a missed report top $70,000.

For a one-person store like Novedades y Servicios, this new surveillance regime is both business-crushing and a huge invasion of financial privacy.  “I’ve always followed the law and will continue to do so,” Gomez says. “But this would be so costly that it would probably put me out of business.”

The government says the order is temporary—expiring in September—but past surveillance orders issued by the same federal agency have been repeatedly renewed past their expiration dates. Some have eventually been expanded to cover the entire country.

Rather than go away quietly, Gomez filed a federal lawsuit on April 15, 2025. Our public interest law firm, the Institute for Justice, represents her. For now, at least, she can breathe easy. The U.S. District Court for the Southern District of California issued a temporary restraining order on April 22, pausing enforcement for a short period while the court considers more permanent relief.

We also represent Texas business owner Arnoldo Gonzalez, Jr., in a separate case. A court in Texas court paused the new surveillance rules for the companies in that case, but other Texas businesses still must comply.

The underlying issues are the same in both cases. Unlimited surveillance violates the Fourth Amendment, which guarantees people’s right to be secure against unreasonable searches and seizures.