CIBanco Sues U.S. Treasury and Warns of Economic Fallout if Dollar Disconnection Goes Ahead
CIBanco has filed a lawsuit in the United States against the Department of the Treasury following an order from the Financial Crimes Enforcement Network (FinCEN) accusing it of alleged money laundering and ties to illicit activities. The measure, set to take effect on September 4, would prohibit U.S. financial institutions from maintaining or processing dollar operations on behalf of the Mexican bank. The institution claims that the scope of the order amounts to its “institutional death.”
In its legal filing, the bank argues that the restriction could leave more than $40 billion in legitimate funds it manages for U.S. interests — such as pension funds, investment funds, businesses, and individuals — stranded and unusable. It emphasizes that its business model is critically dependent on access to dollar transactions. CIBanco claims to have requested details about the accusations, but asserts that the notice is vague. The institution reported the loss of its U.S. correspondent banks, which has already affected its foreign exchange operations and international transfers, and warned of a possible impact on around 3,000 jobs.
FinCEN’s action, taken under its authority to protect the U.S. financial system, typically results in the immediate withdrawal of correspondent relationships and isolates the designated bank from the dollar network. Such decisions discourage global counterparties and heighten the perception of reputational risk, forcing customers and suppliers to restructure their business relationships. For entities with significant exposure to dollar payments and hedging, the operational hit can be severe even before the measure takes effect.
If the disconnection goes through, the largest impact would fall on CIBanco clients with needs in foreign trade, international treasury operations, and currency hedging, who may shift to other institutions to ensure continued access to dollars. Given the weight of the U.S. market in Mexico’s trade flow and the ongoing trend of manufacturing relocation (nearshoring), ongoing access to foreign currency services is crucial for the day-to-day operations of exporters, importers, and supply chains.
In terms of financial stability, analysts believe the systemic risk is limited due to CIBanco’s smaller share of total banking system assets, which are dominated by large-scale banks. Public data from regulatory authorities shows that, on average, capitalization ratios of Mexico’s banking system remain above regulatory thresholds, with ample liquidity and controlled delinquency levels. Still, this episode could reinforce the trend toward “de-risking” in correspondent relationships—a phenomenon that hits medium-size banks and niche players such as money transfer companies, exchange houses, and cross-border fintech firms the hardest.
The evolution of the case will be closely monitored by Mexican regulators — the Ministry of Finance, CNBV, Bank of Mexico, and the Financial Intelligence Unit — due to its potential impact on competition and operational continuity. In court, CIBanco is seeking to block implementation of the order while the case is litigated on its merits, a process that could involve injunctions and administrative reviews. For clients, the practical advice is to accelerate contingency plans, diversify counterparties, and review payment clauses in international contracts.
Against a backdrop of moderate growth, still-high interest rates, and an exchange rate sensitive to regulatory and trade news, the outcome will set a precedent for the scope of anti-money laundering cooperation between Mexico and the United States. If the order stands, the adjustment of funds and business relationships will be quick but orderly at the systemic level; if it is suspended, it will send a signal that international scrutiny of compliance and due diligence processes will only intensify.
In summary, the dispute between CIBanco and the U.S. Treasury combines immediate operational risks for the bank and its clients with limited systemic impact. The case underscores the centrality of the dollar for the Mexican economy, integrated with North America, and points to a phase of stricter anti-money laundering controls, affecting compliance costs and the configuration of correspondent relationships.
