Trump wants to know why you’ve got $200 in your back pocket

Donald Trump is shrinking the federal government and getting it off people’s backs. That is correct for the first half of that statement, but not for the second. On the contrary, in at least one respect, the government is going to be paying citizens even more attention in the future.

In one of the lesser-noticed initiatives of recent weeks, the Financial Crimes Enforcement Network of the US Department of the Treasury (FinCEN) has issued a Geographical Targeting Order forcing all banks and other money services businesses to send it Currency Transaction Reports whenever anyone withdraws $200 from an ATM or makes any other transaction involving that sum of cash in one of 30 ZIP code areas adjoining the Mexican border. Previously, it took a cash transaction of $10,000 to trigger such attention — a threshold set in 1952 when the real value of a dollar was far higher than it is today.

The stated aim is to tackle drug cartels, which trade large amounts of dollar bills to avoid detection. But it will, of course, capture innocent citizens as well, many of whom have perfectly legitimate reasons to hold and pay for things in cash. While online and card payments may be convenient, they bring a major hazard: what happens when electronic payment systems fail, as they often do? Cash is an important part of a resilient financial system, and holding $200 in bills in your wallet is hardly an unreasonable insurance policy to ensure that you can always pay for groceries or fill your car — even though, in some areas, it will now mark you out as a target of suspicion.

Moreover, not everyone has the means to pay electronically, either by choice or because they face barriers to opening accounts. According to the Federal Deposit Insurance Corporation, in 2023, 5.6 million American households — 4.2 percent of the total — did not have any kind of bank account. While the new order does not make it illegal for them to continue using cash, it does mean that from now on, their financial lives will be constantly monitored.

Will it even help tackle the drug cartels? Even putting aside the issue of liberty, FinCEN risks obscuring itself in a fog of data. Even with the threshold for filing Currency Transaction Reports set at $10,000, the agency handled 57,000 of them last year. At $200, that number will presumably rise well into the millions. Maybe artificial intelligence can process such a volume of information and identify suspects worthy of further investigation, but you can bet $200 that it will also lead to a dramatic increase in human-led investigations. There will be more knocks on doors, more officials snooping outside suspects’ homes.

Donald Trump is soon going to learn that if you want to shrink the size and cost of government, you also have to shrink its scope. Lumbering government agencies with extra demands while cutting their workforces is not going to end well. Nor is it politically expedient to tell people you are going to drain the “swamp” of corrupt federal government — only to make those same voters targets of constant corruption investigations. If you have $200 in your back pocket, the government is coming for you.