CALEXICO â€“ With recent bank closures in Calexico and concerns of other branches closures in nearby cities, Gary Wyatt, Director, Intergovernmental Relations, and Raymond Castillo, BOS Supervisor, District 5, will headÂ to Washington D.C. TuesdayÂ looking forÂ solutions.
Wyatt and Castillo along with other border city officials are scheduled to meet with Congressman Henry Cuellar, who serves on theÂ Subcommittee on Homeland Security, on Wednesday, September 30, toÂ create a legislation requiring banks to provide services to border communities.
â€œThe key is to create a new legislation that will require banks to serve border communitiesâ€ said Castilo â€œThe regulations have given the banks along the border an excuse to back out.â€
Claiming it was a â€œbusiness decisionâ€ Rabobank, JP Morgan Chase, and Bank of America have closed down leaving local residents and merchants with little to no options to conduct their banking needs in the city of Calexico.
â€œThe real reason is that the anti-money laundering law, anti-terrorist law, and the Dodd-Frank bill make it costly for banks to operate, considering they must process excessive paperwork to be compliant, causing additional staffing,â€ said John Renison, BOS Supervisor, District 1.
In San Ysidro, there have been a total of eight bank closures in the last 20 months.
According to Renison, local money exchange agencies (casas de cambio) are being forced to ship their money to San Diego because local banks will not accept it.
â€œThe federal government needs to understand that if someone is going to launder money all they have to do is drive to Indio or any other nearby city,â€ said Renison. â€œBank closures are not going to stop these kinds of activities and in the meantime we are all paying the price, itâ€™s an inconvenience.â€
On April 27, Tim Walsh, Chief of Staff from the Office of the U.S. Representative Juan Vargas 51stÂ Congress District attended a round table meeting in Calexico where city officials, banks and concerned residents expressed concern of the recent bank closures.
During that meeting Walsh said, â€œThe concern over the closure of financial institutions is an issue congress has been looking into for a period of time. This is a national concern and we are moving quickly. 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.â€
â€œBanks have regulations they must follow to avoid money laundering. Complying with the four-page document is very costly and time consuming. This isnâ€™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,â€ said Walsh.
â€œRelief plans are in discussion, such as asking the OCC to deny bank closure petitions for the benefit of the community,â€ Walsh said. Other discussions include offering â€œsafe harbor,â€ 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.
Assemblyman Eduardo Garcia, 56thÂ State District said, â€œWe 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 congress that such policies are causing an adverse effect to grow local and regional economies. We would show we have a united voice on this issue.â€
â€œWe 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,â€ Garcia said.
El Centro, Brawley, and Holtville banks are also in jeopardy since they are within 25 miles of the border, requiring the proper documentation be completed with large deposits.
â€œAt this time there has been no mention of any bank closing in El Centro, but if and when the first one closes, panic will happen,â€ said Renison.
The meeting in DC will be strictly and solely to discuss the banking issues.