Banks wooing Mexicans on both sides of the border

By Traci Carl Associated Press Published August 18, 2002

Actopan, Mexico -- Standing in a line that snakes out a bank door, relatives of migrants to the United States wait hours to collect money sent back home. In their dirt-stained cowboy hats and sun-bleached shawls, they might not seem like a hot market for major financial institutions.

But with $9.2 billion sent home to Mexico last year, they are being wooed by banks on both sides of the border.

U.S. banks are expanding into Mexico, hiring Spanish-speaking employees and easing red tape for migrants -- even those living in the United States illegally -- so they'll open accounts. Money transfer fees are falling, and banks are studying the possibility of offering expanded services such as loans and insurance.

Until now, migrants had few options. They often paid companies such as Western Union up to 20 percent of the money they wire home and stashed their savings under mattresses or in cookie jars.

In Kentucky, the Republic Bank & Trust Co. began opening migrant accounts in September that include two ATM cards: one for the client in the United States, and another for a family member abroad.

The bank has hired 10 Spanish-speaking customer service representatives, and--like many other banks across the United States--accepts Mexican consulate identification cards, making it easier for those without U.S. identification to open accounts.

Bank officials say they have just under 500 accounts now and hope to expand that to 3,000 by next year.

"It doesn't take a rocket scientist to look around our communities and see the need," Chief Executive Steve Trager said of the area's growing migrant population.

Wells Fargo allows migrants to transfer money from U.S. accounts to accounts with a partner bank, Bancomer, in Mexico. With the InterCuenta Express account, customers can send as much as $1,000 for a flat $10 fee. By comparison, Western Union charges migrants in California $75 to send $1,000.

Citigroup--which last year bought Mexico's second-largest bank, Banamex--is also studying binational accounts.

Increasingly, the question of whether someone is legally in the United States doesn't come up in account applications. Banks say they take care to make sure the accounts aren't used to launder money or for other illegal purposes.

"It is not supporting illegal immigration," said Jane Hennessy, senior vice president of Wells Fargo's international group. "These are people in our community who need our services."

On a recent afternoon in central Mexico, Florencia Gaspar stood in line outside a Bancomer branch in Actopan--a town of 40,000 people that receives an estimated 80 percent of its income from migrants working in the United States. She said her family recently opened its first savings account to keep some of the hundreds of dollars its receives each month from relatives in North Carolina and Las Vegas.

"People have more confidence," Gaspar said. "There are more ways to open an account with less money."

Yet Gaspar still receives money from the United States by wire. She said she had heard nothing about the possibility of sending money between U.S and Mexican accounts. Even the bank branch's manager said he was unaware of Bancomer's program with Wells Fargo.

After hearing about InterCuenta Express, Gaspar's sister-in-law snorted in disbelief, saying there must be a catch. Our relatives "send us a little, and then [the banks] take out a lot," she said.

Since taking office in December 2000, Mexican President Vicente Fox has pushed to lower money transfer fees and expand the acceptance of the consular identification cards in the United States. While Wells Fargo has worked with Fox's administration, many other banks say their programs are independent responses to a growing market: an estimated 20 million Mexicans north of the border.

Still, Armando Esparza, director of the Zacatecas state migration assistance program, said many migrants and their families know little about the new programs. Some worry that information given to banks could be used by immigration officials. Others are mistrustful after years of being ripped off by everyone from customs to bank officials in Mexico.

"It's not so simple," Esparza said. "No one believes in any bank. They are rats and thieves. They are only looking after their interests."

Historically Mexican banks have targeted the country's upper class, and a series of banking crises undermined the confidence of many Mexicans. Esparza claims banks want to profit off migrants who don't understand their legal rights or the basics of keeping an account balance.

"Banks are changing because it's good for business, because there are millions in remittances," he said. "If there wasn't money to be made, nothing would change."

Standing in another line curling out Bancomer's door in Actopan, Juan Moreno waited to learn the requirements for opening an account in Mexico. Two days earlier, he had returned from years of construction work in Clearwater, Fla., where he wired money home through a local money exchange.

He knows other migrants who opened bank accounts in the United States, then sent money to accounts in Mexico. But he's suspicious.

"To be honest, I can't even comprehend it," he said.