Letters to the Hill
Accepting Matricula Consular Cards
July 19, 2004
Chairman C. W. Young
Dear Congressman Young:
The Independent Community Bankers of America urges you to strike language in the Transportation and Treasury Appropriations bill that would bar the Treasury from enforcing regulations that currently permit financial institutions to accept matricula consular cards as a form of identification.
The USA PATRIOT Act imposed additional burdens on the nation's financial institutions by requiring them to take steps to verify the identify of their customers, but ICBA members understand that they are necessary to detect and deter money laundering and terrorist financing. In a successful attempt to balance these considerations, the Treasury's customer identification regulation provided financial institutions the flexibility to verify the identity of prospective customers using methods that they believe would be most effective by allowing individual banks to assess and address the particular risks associated with each account and borrower. Many community bankers believe that the matricula consular card is one form of identification that they should be permitted to use to comply with the regulation. The amendment added by the subcommittee would undermine this option.
More important, the amendment could actually undermine the goals of the USA PATRIOT Act. Allowing consumers to use the matricula consular as a form of identification where appropriate is an effective way for those without bank accounts to qualify for banking services. It is better to encourage non-U.S. citizens to participate in the banking system since that provides law enforcement with audit trails of transactions. Precluding banks from accepting certain foreign identification documents and forcing these individuals to turn to other avenues to meet their financial needs, could help foster the development of underground financial markets. Transaction information is extremely difficult to obtain and monitor in these markets, so encouraging their development could help facilitate terrorist financing and money laundering.
This is also contrary to the repeated urging by Congress, financial regulatory agencies, and others that banks take greater steps to bring the unbanked into the nation's formal financial services structure. Unless the matricula consular can be used as bank customer identification, many unbanked individuals could be relegated to check cashers and payday lenders.
For these reasons, ICBA recommends that the Appropriations Committee remove this amendment before sending it to the House floor.
Thank you for considering our views.
Camden R. Fine