Sunday November 18, 2001 -- 08:36 AM EST

Banks broaden ID requirements

By Mike Comerford
(Chicago) Daily Herald Business Writer

Firstar banks in the Chicago area have joined a growing number of banks that are accepting Mexican-issued identification cards to open checking and savings accounts.

The subsidiary of Minneapolis-based US Bancorp began its new policy at about 15 of its 42 local branches on Nov. 1.

The action is seen by a growing number of banks as a way to break down another barrier to banking in the burgeoning Hispanic community.

However, critics say it is merely a way to offer services to the growing illegal alien population in the United States. Illegal aliens routinely pay taxes and they can bank without immigration authorities being notified.

"Whether someone is legal or illegal is not for us to determine," said Alice Perez, Hispanic marketing manager for US Bancorp. "That is for the (Immigration and Naturalization Service) to determine ... What we look at is who the person is and what kind of financial responsibility they have."

Hispanic-oriented banks such as Puerto Rico-based Banco Popular, which has offices throughout the Chicago area, have long been using identification cards issued by the Mexican consulate. The practice is more common in the southwestern United States where giant Wells Fargo Co. recently announced a similar policy.

However, the practice has been slow to come to Chicago area banks. For example, Bank One Corp., the area's biggest bank, does not accept such identification here.

All the major banks and most of the smaller ones have Hispanic initiatives such as outreach programs and smaller minimum balances geared to the Hispanic community. Harris Bank, which has 150 local branches, has been taking Mexican ID cards since January in a pilot program at its Waukegan branch. The pilot will be re-evaluated the first week of December and a decision on widening the program will be made then.

"It's a very safe document," said Alberto Azpe, president of Hispanic Banking, Harris Bank. "After the passport it is the first document accepted in Mexican banks."

Mexican consulates require proof of identity before issuing such cards. Accepting such cards means banks don't need to ask for proof of legal residency.

Usually, as is the case with Firstar and LaSalle Bank N.A., the bank also requires secondary identification. Such identification can be a W-8 tax form or other proof of income.

Nancy Mathis, a spokeswoman for the Internal Revenue Service, said the agency doesn't share information with other agencies, such as the INS. Pressure to accept Mexican-issued identification is likely to increase under the administration of President Vicente Fox, who stresses the rights of the country's migrant population in the United States. The director of Mexico's Office of Migrant Affairs, Juan Hernandez, spoke 10 days ago at a Federal Reserve Bank of Chicago conference on what can be done to aid transfer of remittances from Mexicans here to relatives in Mexico.

Hernandez said there are an estimated 5.5 million Mexicans in the United States legally and about 3 million here illegally. He said identification methods, such as Mexican identification cards, should be adequate for banks.

Manuel Orozco, program director of the Washington, D.C.-based policy research center Inter-American Dialogue, estimated that more than 40 percent of Mexican migrants do not have bank accounts.

That population represents a lot of hidden wealth, Hernandez said, adding that Mexicans in the United States are likely to send $9 billion in remittances to family members in Mexico. To tap that market, most area banks have cooperative agreements with Mexican banks for money transfers.

Still, most money transfers are still being conducted by currency exchanges and wire transfer firms such as Western Union.

Area banks are waking up to the need to market more aggressively to the Hispanic community as an untapped source of new accounts. Harris, which has one of the more aggressive Hispanic programs, has increased its accounts with the group by 40 percent in two years, Azpe said.

Then why only accept Mexican identification cards and not, say, Nicaraguan or Columbian cards? "The reason," US Bancorp's Perez said, "is they haven't come forward and asked us to."

Marija Potkonjak of Medill News Service contributed to this report.