House Appropriations Committee votes against matrícula consular
Immigrants' Rights Update, Vol. 18, No. 5, August 9, 2004

The Appropriations Committee of the U.S. House of Representatives recently voted to retain an amendment to the Transportation and Treasury appropriations bill that, in effect, would prevent banks from accepting the matrícula consular as proof of identity from people seeking to open bank accounts.  The vote, which took place on July 22, was very close—26 votes in favor of keeping the anti-matrícula consular amendment and 25 votes against it.  Four Republican committee members voted with most of the Democratic members to remove the amendment, while one Democrat voted with the Republicans to keep it.

The matrícula consular is an identity card that Mexican consulates issue to Mexican citizens residing outside Mexico.  Many local government agencies, including police departments, accept the card as a valid form of identification.

The anti-matrícula consular language became part of the appropriations bill on July 15 when the Transportation, Treasury and Independent Agencies Subcommittee of the Appropriations Committee approved the amendment, which was offered by Rep. John Culberson (R-TX).  The amendment provides: “None of the funds made available in this Act to the Secretary of the Treasury may be used to publish, implement, administer, or enforce regulations that permit financial institutions to accept the matricula consular identification card as a form of identification.”  If it were to become law, the amendment would block U.S. Treasury Dept.–issued rules that implement section 326 of the USA PATRIOT Act.  The subcommittee approved the amendment shortly after Culberson offered it and without holding hearings on it.

The Treasury Dept. issued its final regulations implementing section 326 on May 9, 2003.  Those regulations require financial institutions such as banks, credit unions, and thrifts to develop a written customer identification program that is subject to evaluation by regulators; they give banks flexibility to adopt verification procedures appropriate to their circumstances; and they place the responsibility squarely on banks to establish procedures that allow them to form a reasonable belief that they know each customer’s true identity.  In establishing their procedures, many banks decided to accept the matrícula consular as proof of the bearer’s identity.   The Mexican consular ID card has been issued by the government of Mexico to its nationals overseas since 1871. 

On July 1, 2003—less than two months after it issued the final rule—the Treasury Dept. issued a notice asking the public and interested parties to provide additional comments regarding whether banks should be prohibited from accepting foreign government–issued documents other than passports as acceptable forms of ID.  This highly unusual action reportedly was prompted by pressure from certain members of Congress.  (For more on this, see “Acceptance of the Matrícula Consular in the U.S. Is Under Attack,” Immigrants’ Rights Update, July 15, 2003, p. 3.) 

Commentators overwhelmingly supported acceptance of foreign identity documents.  Of the 23,898 comments submitted, 19,770 (or 83 percent of the total) asked that the rules remain unchanged.  (See “Commentators Favor Matrícula Consular, but ID Acceptance Encounters Other Roadblocks,” IRU, Sept. 4, 2003, p. 3.)  On Sept. 18, 2003, the Treasury Dept. announced that the rules allowing banks to accept such documents from persons seeking to open accounts would remain unchanged.   

Extreme immigration restrictionists in Congress have used that decision to advance their agenda, appealing to fear by arguing that banks’ acceptance of the matrícula consular poses a threat to national security.

Before the Appropriations Committee voted, many advocates, banks, financial associations, and even the secretary of the Treasury contacted committee members, urging that the anti–matrícula consular provision be removed from the bill.  In a July 21, 2004, letter addressed to the Appropriations Committee chairman and ranking member, the Treasury secretary wrote: 

[The] Administration believes as a general matter that Americans are better protected if consumers of all nationalities are invited into the financial mainstream.  Having consumers use regulated financial services providers offers better protections than leaving sectors of the population to underground providers, such as unregulated hawalas[*], where they may be more exposed to elements involved in money laundering and terrorist financing.  Because this provision could drive large sections of the U.S. population to underground financial services, it would weaken the Government’s ability to enforce our money laundering and terrorist financing laws.

Despite the letter and a reminder to committee members from the chairman that the Bush administration opposes the Culberson language, most Republicans on the committee voted against removing it.

Committee members who spoke against removing the provision provided no evidence that the Treasury Dept. rules have not worked.  Instead, they cited the June 2003 testimony of an FBI official who questioned the reliability of the matrícula card, claiming that it is easy to obtain through fraud and lacks adequate security measures to prevent it from being easily forged.  That testimony cited examples of “alien smugglers” being arrested with “as many as seven different Matricula Consular cards in their possession” and an Iranian national who was arrested with a matrícula card in his name.

Since June 2003, however, the Mexican government has implemented a system that relies on a centralized database to help ensure that only one matrícula card will be issued to any individual.  As Appropriations Committee members pointed out during the debate over the amendment, the matrícula card is far more secure than many ID documents issued by government entities within the United States.  They noted, for example, that there is no shortage of false IDs and driver’s licenses available for use by underage young people intent on buying liquor.  Yet of all the identity documents issued by governments in or outside the U.S., the Culberson amendment would explicitly ban only the matrícula consular as proof of identity in opening a bank account in the U.S.

The matrícula card contains many security features designed to discourage forgeries and to ensure that Mexican and U.S. law enforcement officials are able to determine a particular card’s authenticity.  But no identity document, including none produced and accepted in the U.S., is 100 percent counterfeit-proof or immune from being used fraudulently.  If a particular identity document were to be deemed unacceptable simply because it sometimes has been abused, then no identity document currently accepted by banks would be acceptable.

The Treasury Dept.–issued rules that give banks the discretion to accept a Mexican consular ID are aimed at stopping, detecting, and prosecuting international money laundering and the financing of terrorism around the globe.  Banks and thrifts, in contrast to some other providers of financial services, are subject to federal regulation, routine examinations, and extensive record-keeping and reporting requirements.  This enhances the ability of federal officials to monitor international money transmissions and distinguish legitimate transfers from those conducted for money-laundering or terrorist-financing purposes.  Discouraging millions of people who reside in the U.S. from using the legitimate, regulated banking system would seem to run directly counter to the goal of ensuring the nation’s security.

Both the chairman and the ranking member of the House Committee on Financial Services argued against the Culberson language, writing to the Appropriations Committee on July 15, 2004, that “[w]hile the intent of the proponents of the amendment may have been to discourage the acceptance of a particular form of identification issued by the Mexican government, by casting doubt on the legitimacy of the entire customer identification and verification regime established by section 326, the practical effect of the amendment is to strike a serious blow at the government’s efforts to combat terrorist financing.”

Furthermore, preventing Mexican immigrants from opening bank accounts is bad economics.  When they open bank accounts, this increases the overall percentage of income that goes into savings and makes more money available for reinvestment in the country’s economy.  Banks’ acceptance of consular ID cards helps bring immigrants out of the informal and unregulated economy and into the financial mainstream.  When immigrants cannot open checking and savings accounts, they are forced to carry and store large amounts of cash and rely on illegal loans; their financial transactions are harder to track and to tax; and they are less likely to feel that they have a financial stake in the communities where they reside.  This not only penalizes them; it also penalizes the U.S. and its economy.

Enabling immigrants to open bank accounts helps deter robberies and assaults and reduces the threat of crime in the communities where they live.  More than four out of five people who do not have bank accounts use check-cashing outlets and, therefore, often must carry large sums of cash, making them easier targets for crime—especially theft or robbery.  When immigrants deposit their money in banks, they are less tempting targets for criminals seeking cash.  For this reason, police departments across the country support the use of consular ID cards and efforts to link immigrant workers to mainstream financial institutions, because they help reduce crime and violence and promote good community policing.   

The anti­­–matrícula consular provision is not law—yet.  Most likely, the Treasury and Transportation appropriations bill will reach the House floor not as a stand-alone bill but rather as part of an omnibus appropriations bill.  The challenge for groups and financial institutions that support acceptance of the matrícula consular is to make sure that a similar provision is not included in an omnibus spending bill.  The close vote in the Appropriations Committee and the White House’s apparent opposition to the Culberson language give reason to hope that it still may be removed.

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