Banks aid and abet illegals, get away with it

U.S. banks come to aid of undocumented

Consular ID cards increasingly accepted as banks court Hispanic newcomers.

July 7, 2002

By GRAHAM GORI The New York Times

MEXICO CITY -- Before migrating illegally to the United States, many Mexicans throw away various forms of personal identification in an effort to avoid prosecution if caught by U.S. authorities. Recently, they have found an unexpected ally in their struggle to regain a legal identity once they are across the border: U.S. banks.

For years, the banks refused service to most Mexican immigrants because they could not verify their identities. But an unforeseen twist to an initiative by Mexico's government has allowed banks in the United States to court the millions of illegal Mexican immigrants and the billions of dollars they represent.

After the Sept. 11 terrorist attacks, the Mexican government feared that the estimated 3.5 million Mexican citizens in the United States who had no identification - no passport, Social Security card or driver's license - could be mistaken for terrorists. It began lobbying the U.S. government to recognize as a valid piece of identification a consular identification card that it has been issuing for more than a decade.

Although the U.S. government has not agreed to accept the consular ID card, the card has been gaining legitimacy elsewhere. Many police departments recognize it. And much to the surprise of Mexico's government, the cards have been opening the doors into - and for - the banking world.

Mexico's government hopes that with access to banks, its citizens will find cheaper vehicles than money-transfer businesses like Western Union for sending billions of dollars in remittances to relatives back home. U.S. banks hope to reach out to the large and growing number of Hispanics, who are expected to surpass blacks as the largest minority group in the United States by 2005.

"If we're to be successful and continue to grow, we're going to have to become the bank of choice for the Hispanic community," said Jeffrey Bierer, a spokesman for Bank of America. Illegal Mexican immigrants, he said, make up a large chunk of that community.

"It is a significant market now," he said. "It's growing every year."

The bank, which has most of its franchises in states with large populations of Mexican immigrants, such as California, Texas and Florida, recently introduced a $40 million advertising campaign aimed at Spanish-speaking customers. It is one of some 60 banks nationwide, mostly in Hispanic areas, that have begun catering to illegal immigrants, who often gain legal residence and become loyal customers.

The consular ID card "is a form of identification that the private sector finds acceptable," said John Byrne, senior counsel and compliance manager at the American Bankers Association. "We feel fairly comfortable" with the consular ID "as a form of identification, and we're becoming more comfortable the more we speak" with the U.S. government, he said.

Though the federal government has not officially recognized the cards, it has not spoken against their increased use across the country. But the Immigration and Naturalization Service has warned that such an ID should not be mistaken as a security blanket for illegal immigrants.

"The bottom line is that if these people, regardless of whether they have bank accounts - and they could be big accounts - if they are not legally here, they're still not legally here," said Bill Strassberger, an INS spokesman in Washington.

But because banks must prove only the identity of their customers, not the legality of their immigration status, the ID card has helped the banks pursue a mostly untapped market.

"Right now it's like a landslide - the bankers come to us," said Enrique Berruga, undersecretary for foreign affairs in Mexico's foreign ministry. "It's very good news for the American banking industry that all that money that was under the mattress is now in their arteries and their financial systems."

Berruga said the 18 million legal and illegal Mexican immigrants in the United States represent at least $450 billion in purchasing power.

Although only a small percentage of U.S. banks have begun accepting the consular ID card, many of the largest institutions are leading the way.

Wells Fargo, based in San Francisco, was the first bank to accept consular IDs, and in six months it opened more than 30,000 bank accounts for immigrants who had no other documents. It has a money- transfer service and plans to offer credit cards and mortgages to those presenting the cards.