Last updated on April 23, 2015
In recent years, the crackdown on money laundering has seen a halt in cash deposits, and as of late, the closure of Mexican bank accounts.
Numerous legal business owners along the US – Mexico border are growing resentful, claiming bank vigilance has gone overboard and is having a negative effect on law-abiding citizens.
American banks, who have grown wary of potential penalties which in part come from the continual HSCB stigma, continue to close Mexican bank accounts or burden new clients with restrictions.
The burden is particularly challenging for Mexico businesses whose customers pay in US dollars. In Mexico, local banks still refuse to take American money even after the 4-year-old ban on cash deposits was lifted by the government in September.
Mexican businesses cheered last year when President Enrique Pena Nieto scrapped the $14,000 monthly cap on dollar deposits in Mexican banks acknowledging the measure hurt law-abiding companies.
Roberto Castro, chief executive of one of the largest Mexican pharmacy chains on the U.S. border, compares the approach to chemotherapy.
“You kill the bad cells but you also kill the good cells,” said Castro, whose father founded Farmacias Modernas de Tijuana SA, known as Farmacias Roma, in 1964. “They need to be more targeted in their strategies to combat money laundering.”
However, California’s Imperial Valley Press editorialized that border banking may become “a niche operation, where choices become very limited.”
American regulators are warning banks against simply closing entire categories of customers and instead, are recommending a case-by-case review.
In a conference, Comptroller of the Currency, Thomas Curry, explained, “We do not tell banks how to conduct their business. We certainly do not direct them to provide services to some customers and not to others.”
Mexican business owner Hugo Torres had his bank account closed by Bank of America without explanation after having the account for 25 years. Torres owns the popular Rosarito Beach Hotel, where Americans flock to every year.
Torres says he’s had to be creative, scattering money among different Mexican banks in small amounts. “We have something like 10 banks,” he said. “This has gone overboard.”
The major US banks won’t disclose just how many accounts they’ve closed along the border, but JPMorgan Chase & Co. say they’ve closed less than 5,000 business accounts of companies based outside the US. They said the closures add up to $20 million in annual sales since 2013, but would not say how many of those accounts were Mexico-based.