A federal judge has issued a temporary injunction halting the enforcement of a Treasury Department directive that imposed stricter data collection requirements on money service providers. The ruling, handed down by U.S. District Judge Leon Schydlower, supports two El Paso-based businesses—Valuta Corporation and Payan Fuel Center—who argued that the regulation would cause irreversible damage to their operations. The order, initially introduced in April, significantly lowered the transaction threshold requiring detailed personal information from customers, from $10,000 to just $200. This sweeping change was part of a broader Geographic Targeting Order targeting specific zip codes across Texas and California, sparking legal challenges from affected businesses and civil liberties advocates.

Judge Schydlower ruled that the directive appeared “arbitrary and capricious,” citing the potential for immediate harm to small financial service providers if the rule remained in effect. He emphasized that without emergency legal relief, these companies faced serious risks such as reputational damage, customer loss, and even business closure. Valuta Corporation’s owner, Ashley Light, expressed gratitude for the court’s decision but voiced concern that the relief did not extend broadly to all impacted small businesses. The lawsuit marks the third legal challenge against the mandate, with previous rulings in California and San Antonio also suspending the regulation temporarily.

The Treasury Department’s directive was designed to enhance financial oversight in specified regions near the U.S.-Mexico border, particularly affecting communities reliant on remittance services. Under the rule, businesses were required to collect sensitive personal data—including Social Security numbers and home addresses—for any transaction exceeding $200. Critics argue this infringes on financial privacy and disproportionately burdens low-income clients who rely on these services for international transfers. Legal representatives for the plaintiffs claim the policy subjects working-class individuals to unnecessary surveillance while increasing operational costs and administrative strain on small firms.

This recent ruling aligns with earlier judicial pushback against the regulation, reinforcing concerns about its legality and impact on vulnerable populations. Andrew Ward of the Institute for Justice, representing the plaintiffs, noted that all three courts reviewing the case so far have found the order likely unlawful. With a final decision expected by July, legal observers anticipate a broader resolution that could permanently revoke the directive. As debates over financial privacy and regulatory overreach continue, this case highlights the tension between national security objectives and the rights of small businesses and their clientele.