Banks Sigh Relief With ID Card Nod
By ANDREW SIMONS
Orange County banks courting Hispanics dodged a bullet last week when the Treasury Department reaffirmed the use of Mexican identification cards to open bank accounts.
For the past few years, most banks here have accepted the cards, known as Matricula Consular de Mexico, as a way to court Hispanics who might otherwise bypass banks in favor of cash.
Earlier this year, the Treasury Department signed off on foreign-issued ID cards for bank accounts as part of its rules under the USA Patriot Act of 2001, passed after Sept. 11, 2001.
The department readdressed the issue during the summer after several congressman, including OC’s Dana Rohrabacher and Chris Cox, sent letters to Homeland Security Director Tom Ridge raising security concerns.
“This issue is extremely important for reasons of national security,” said Rohrabacher, who represents Huntington Beach. “The Mexican government is bullying local governments into accepting these cards as identification,in spite of the fact that these cards are not reliable identification, and the only individuals who have a reason to use them are illegal aliens.”
The Treasury’s move last week upholding use of Mexican and other foreign ID cards came after two months of public comments on the issue.
The move was greeted with a sigh of relief by banks.
“We are really happy about the decision,” said Rossina Gallegos, vice president and Hispanic segment manager for San Francisco-based Union Bank of California, the No. 3 bank operating in OC. “It’s very important.”
Accepting the card brings immigrants into the system where banks can keep tabs on any unusual activity, said Vernon Aguirre, California regional president at Puerto Rico’s Banco Popular, which has branches and check cashing outlets in OC.
“It’s just like anything else. You have to know your customer,” Aguirre said.
The Treasury’s decision doesn’t change anything for local banks. But a different outcome would have caused retooling and rethinking about how they go after Hispanic customers.
“We’re very pleased with the result,” said Ken Preston, a spokes-man for Bank of America Corp., the largest bank operating in OC.
Banco Popular’s Aguirre said he wasn’t “too concerned that they wouldn’t approve it” since banks already accept Matricula and other cards.
The matter is a big one for banks here. In part because of the ID issue, many Hispanic immigrants bypass banks altogether and deal in cash. The amount of deposits lost by Southland banks is estimated at $357 million a year, according to a study done for the Business Journal by California State University, Fullerton’s Center for Public Policy and the Institute for Economic and Environmental Studies.
The lost deposits could support some 4,000 jobs a year in the Southland if they were captured by banks and loaned out to other businesses and people, according to the Cal State Fullerton study.
While 60% of OC Hispanics use banks, some 200,000 others don’t, according to Cal State Fullerton. They spend about $2.4 billion in cash in OC a year, the study found.
“For us, the Latino community has been a major market,” said Peter Villegas, first vice president of corporate affairs at Seattle-based Washington Mutual Inc., OC’s largest savings and loan.
San Francisco-based Wells Fargo & Co., the second largest bank operating here, not only accepts the Mexican consular card but also Guatemala’s version, said Shelley Freeman, executive vice president and head of Wells Fargo’s Los Angeles metro region. The bank has a division dedicated to working with His-panics, she said.
Banco Popular has been among the most aggressive in going after OC Hispanics. The bank, whose name in Spanish translates to bank of the people, offers checkcashing stores as a way to introduce non-banking Hispanics to checking accounts and other offerings.
“We are targeting to be the dominant bank to the community that we serve,” Aguirre said.
Some Hispanics are leery about stepping into banks because they didn’t trust them in their home countries, Aguirre said.
