Kansas City banks reaching out to illegals (criminals)


Posted on Tue, Sep. 17, 2002

Kansas City banks reaching out to Hispanics

By MARY SANCHEZ The Kansas City Star

The main reason most Hispanic immigrants come to the United States -- to earn money -- is being grasped as a business opportunity by American banks.

In the past year, several major banks -- including Bank of America, US Bank and Wells Fargo -- have begun accepting the "matricula consular," an identification card issued by the Mexican government.

In doing so, the banks are beginning to court the booming Hispanic immigrant population. Hispanics are believed to be the most "unbanked" -- that is, without a bank account -- of all ethnic and racial groups, according to banking experts.

"Seventy-five percent of the Hispanics in the United States live in Bank of America communities," said Jose Benedetto, an assistant vice president at Bank of America in Kansas City. "We want to embrace them as customers."

Benedetto moved to Kansas City from Los Angeles last year to help the bank serve Hispanics here. Metropolitan Latino leaders believe the community's population is 100,000 to 120,000. The 2000 Census put the population at nearly 93,000, more than double what it was a decade earlier.

Bank of America is ahead of the curve. Besides accepting matriculas in lieu of Social Security cards, the bank recently launched a program to tap into the lucrative remittances market. That is the money immigrants in the U.S. send to relatives in their native lands. For Mexico, $4.7 billion was sent in the first half of this year, according to Banco de Mexico.

Bank of America is one of six banks in the metropolitan area accepting or in the process of recognizing the matricula. Others are Central Bank of Kansas City, Commerce Bank, First National Bank of Olathe, Industrial State Bank and US Bank.

For years, the American banking system's reliance on Social Security numbers was a barrier for some immigrants who wanted to open an account. Social Security numbers are used to track accounts, verify the identity of customers and report taxable earnings to the government. Immigrants illegally in the United States often do not have valid Social Security numbers.

Accepting matriculas skirts that issue. Matriculas are named from the Spanish word "matricular," which means to register. The cards originally were made for identification outside of Mexico, for use when re-entering Mexico and to track Mexicans living abroad.

Some laud the acceptance of matriculas.

"I think the door to the financial mainstream is opening," said Elizabeth Kelderhouse of the Federal Deposit Insurance Corp.'s Kansas City office.

"I don't market this as charity," said Kelderhouse, community affairs officer of the FDIC's division of compliance and community affairs. "I market this as a good business opportunity."

Others say banks are giving legitimacy to lawbreakers, undocumented immigrants, by offering them the security of an American bank account.

"The financial institutions are at the lead because it means business for them today," said John Keeley, a researcher with the Washington, D.C.-based Center for Immigration Studies. "It is discouraging that sizable American institutions would sort of wink at our immigration policies."

Keeley also said it is dangerous for American companies to accept documents issued by a foreign government.

Kelderhouse argues that banks are not in the business of checking immigration status. And she points out that people have never had to be U.S. citizens, or even legal U.S. residents, to bank.

Also, many legal immigrants, such as students and tourists, may not have Social Security numbers but have a need for a bank, she said.

"These financial institutions would not commit corporate suicide," Kelderhouse said. "They have looked into all aspects of this."

Banks say they are providing services to an underserved market.

Benedetto relates the story of the Latin immigrant who walked into his Kansas City office last year. The man laid out $30,000 for his first deposit. A banker's dream, Benedetto said.

Because their main impetus for being in the United States is work, immigrants often have two jobs and compile savings quickly, even when they work for low wages.

Judith Gutierrez lives in Kansas City, Kan. She immigrated two years ago from Mexico City. Last month, she filled out paperwork for her first bank account, with US Bank. She chose US Bank because she has friends who bank there, and it has Spanish-speaking employees.

A housekeeper, Gutierrez deposited $300. The minimum for new accounts is $100.

"I want to buy a house and have savings," Gutierrez said.

Good business

Kelderhouse said she believed banks that were not tapping the immigrant market were stifled by unfounded fears.

"The biggest fear is that they will be breaking the law by banking these people and end up banking a terrorist," Kelderhouse said.

American banking policies and the Patriot Act, which was recently passed by Congress, give banks latitude in deciding which documents they can accept for identification, Kelderhouse said.

Commerce Bank has launched a pilot program accepting matriculas as a primary form of identification at four of its 57 locations.

"We are a financial institution, not agents of the government," said Tom Carignan, a member of Commerce Bank's retail administration group. "It is good business to make these changes that will benefit the community."

Other bankers said serving the Hispanic population was mandated by the Community Reinvestment Act, which says banks must reinvest in the neighborhoods where they do business.

"The fact is that Hispanics are becoming a prominent part of our communities and so we want to serve them," said Kris Cooper, a vice president and compliance officer of First National Bank of Olathe.

First National plans to begin accepting matriculas at its eight locations within a month, Cooper said.

Bridget Mason, a spokeswoman for UMB Bank in Kansas City, said the bank was considering accepting matriculas but likely would wait until the technology was in place to better verify the identifications and protect the bank from fraud.

Some credit-checking agencies are developing ways to track matriculas.

"Matriculas are becoming so much more prevalent that people need to consider catering to this market," Mason said.

Don Powell, chairman of the FDIC, encouraged accepting matriculas at a June conference in New York.

Powell relayed stories of five California banks that took in $50 million in deposits after they began accepting matriculas.

"Figures like that spell out `good business' to me as a former banker and `good policy' to me as a regulator," Powell said.

Sixty percent of Latino immigrants are believed to be unbanked, Powell said. Yet those same immigrants wire more than $18 billion annually back to their home countries.

That is one reason Mexico's president, Vicente Fox, has been urging American banks to serve Mexican immigrants.

Immigrants pay fees to wire their money home -- sometimes high fees. Payday loan offices, and even the U.S. Postal Service, offer the service.

Bank of America is poised to capture the lucrative wire transfer market with its latest effort, SafeSend.

SafeSend, which debuted in some parts of the country in the spring, uses ATMs and debt cards to allow immigrants in the United States to send money to family at home. For $10 per transaction, immigrants can send a minimum of $25 and a $500 maximum per day.

In the Kansas City area, people can sign up for SafeSend through a toll-free number, (1-866-SAFESEND or 1-866-723-7363). The service eventually will be available at Kansas City Bank of America branches.

Matricula surge

The matricula phenomena is swamping Mexican consulate offices nationwide, including the recently opened office in downtown Kansas City.

About 100 matricula applications a week have been taken at the Kansas City consul office since the office relocated from St. Louis in July, said Noemi Hernandez, deputy consul in Kansas City's consul office.

More than 80 matricula applications were taken in four hours during a recent "Feria de Finanzas!"(Festival of Finances) in Kansas City, Kan. The event was sponsored by a variety of groups, including local banks, the El Centro social service agency, the Internal Revenue Service and the FDIC.

The IRS issues individual taxpayer identification numbers, which banks require matricula holders to have to report earnings on interest-bearing accounts.

Like many of the immigrants who lined the hallways of El Centro's Macias-Flores office for the Feria, one man said he was tired of losing $5 for every $100 he was paid to cash the check at payday loan offices.

An immigrant from Zacatecas, Mexico, the man works construction jobs to support his wife and infant son.

He was disappointed when he found out that he would have to get his original birth certificate from Mexico to qualify for the matricula, which he wanted to open a bank account.

Mexicans applying for the matricula must have an original birth certificate, a photo identification from Mexico such as a voter's card or a Mexican driver's license and something to prove they now live in the United States, such as a water or gas bill with a local address.

Matricula cards cost $29.

Another immigrant who attended the Feria said he wanted a matricula to open a savings account and to use as an extra form of identification. An immigrant without identification raises police suspicions, the man said.

"It is very difficult if you cannot prove who you are," the man said.

In many cities with high Latino populations, the cards are being accepted by cities and police agencies.

A July decision by the Chicago City Council to recognize matriculas is one reason why the Chicago consulate has long lines outside its door daily.

Police agencies also have pushed for acceptance of the matricula, noting that robbers prey on immigrants because they often carry large amounts of cash.

Sister Alicia Macias, director of family intervention at El Centro, hopes the arrival of the matricula also will help police distinguish between criminals and good savers.

"The police often think they are selling drugs when they stop someone who is carrying $1,000 in their pocket," Macias said.

The Chicago consulate office issues a new, more secure matricula that includes holograms and other features that can be seen only with a decoder. In Chicago, more than 1,000 new cards are issued daily, Hernandez said.

The new cards soon will be available in the Kansas City office, Hernandez said.