FED-MEXICO BANK TRANSFERS COULD CAUSE PROBLEMS
December 8, 2006
The Federal Reserve Bank and Banco de Mexico are jointly touting a new program known as "Directo a Mexico" that will allow U.S. banks and financial institutions to more easily send money transfers to bank accounts in Mexico, says Jerry Seper in the Washington Times.
According to U.S. and Mexican authorities:
- Mexico received nearly $21 billion in remittances from the United States, most of it from California, New York, Texas and Florida, last year.
- As the remittances to Mexico continue to grow, about 150 U.S. banks and financial institutions have joined the Directo a Mexico program which guarantees "next business day" availability.
But a lack of oversight has many industry and government officials concerned:
- While those who either send or receive money under the program are expected to have established legal residency in the United States, the Federal Reserve Bank has no responsibility to ensure that they have.
- The program is not limited to Mexican migrants now in the United States, but the vast majority of those who take part in it are expected to be Mexican nationals who work in this country or were previously employed.
- That would include those who made Social Security payments, have since retired and now want their benefits sent to Mexico.
- Several law-enforcement officials also noted that unchecked money transfers could easily be used to finance terrorist operations or by drug and alien smugglers.
The taxpayer-subsidized program seems designed to facilitate the transfer of wealth by illegal immigrants to bank accounts outside the United States, said Tom Fitton, president of Judicial Watch, a Washington-based public watchdog agency. And, in addition, undermines our nation's immigration laws and is a potential national security nightmare.
Source: Jerry Seper, "Fed-Mexico plan eases bank transfers," Washington Times, December 8, 2006.
Browse more articles on Government Issues