CALEXICO — Several banks along the border in Calexico have shut their banking operations claiming it was a “business decision.” Those banks include Rabobank and JP Morgan Chase, with the Calexico branch of Bank of America scheduled to close in mid-June.
Daniel Fitzgerald, president of the Chamber of Commerce said, “Business is necessary as we all know. However, with banks closing it has made it difficult for the community and small businesses, including those from Mexicali.”
The issue of bank closures is affecting other border cities as well. “Not only is our border suffering from such events, San Ysidro has had eight bank closures in the last 15 months,” said Fitzgerald.
Roundtable attendees also asked if other Valley cities such as El Centro or Brawley were in jeopardy of bank closures as well, to which Fitzgerald answered, “Yes.”
“They are within the 25 mile radius,” he explained. “The chambers of all these cities meet once a month and this issue is a main concern. All we can do is wait and hope for the best.”
“Surprisingly, branch managers receive an email with such information (about closures) without them having a clue of the situation,” he added.
Tim Walsh, Chief of Staff from the Office of the U.S. Representative Juan Vargas 51st Congress District, also attended the meeting and assured city officials that Vargas’ office is searching for a solution.
“The concern over the closure of financial institutions is an issue congress has been looking into for a period of time,” Walsh said. “This is a national concern and we are moving quickly in this matter. We have talked to the OCC (Office of the Comptroller of the Currency), FBIC (Fight Bad-Faith Insurance Companies) and the DOJ (Department of Justice), who say branches have closed due to business decisions.”
In 2014, over 2,600 banks closures took place in the United States.
“Banks have regulations they must follow to avoid money laundering,” Walsh added. “Complying with the four-page document is very costly and time consuming. This isn’t something new. There has also been an increase of on-line banking and ATM usage, which ultimately influences banks to make such financial decisions,” he said.
“Relief plans are in discussion, such as asking the OCC to deny bank closure petitions for the benefit of the community,” Walsh said. Other discussions include offering “safe harbor,” lining up what banks need to do and how to complete paperwork correctly and completely when detecting money laundering, and lastly, establishment of state-charter banks, added Walsh.
Armando Real, a Calexico council member, noted his concerns. “With banks closing in Calexico, we are forcing the Mexicali community to bank in El Centro or Brawley, as well as do their shopping there — which will be devastating for us,” Real said.
Yet, Fitzgerald noted banks in nearby cities such as El Centro, Imperial, Holtville and Brawley are also in jeopardy.
“They are within the 25 mile radius. The Chambers of all these cities meet once a month and this issue is a main concern. All we can do is wait and hope for the best.” Fitzgerald added, “Surprisingly, branch managers only receive an email in the morning when they come into work informing them their branch is closing without them having a clue of the situation” he added.
Assemblyman Eduardo Garcia, 56th State District, stated, “We are working on possibly forming a Border Region Coalition with other border cities from Brownsville to San Ysidro and in between to bring attention to congressmen and women throughout the country that such policies are causing an adverse affect to grow local and regional economy and have a united voice on this issue.”
“We met with the bank representatives in Sacramento who highlighted three things: one, banks are changing their business mode, utilizing 21st century apps; two, the lack of hard cost loans and money cash flow; and three, federal regulations,” Garcia said.
Roundtable members spoke of retired U.S. citizens who choose to live in Mexicali, but do their banking here, who will likely be most impacted by these closures.
Karina Bustos, Union Bank, AVP of branch administration, said Calexico does not need to worry about Union Bank following suit of the other banks.
“We are not closing our doors, that I can assure you,” Bustos said. “We are picking up in business with many of these retired citizens and trying to make it easier for them. We are helping in any way possible.”
“The good news is that bank closures give local credit unions the opportunity to expand and service their community,” Walsh pointed out.
Representatives from other banking institutions such as Wells Fargo Bank, Sun Community Federal Credit Union and First Imperial Credit Union were also present, and reassured Economic Committee members that their doors will remain open and may include possible expansions.