Immigrants who wire money get help from the Fed
Posted on Tuesday, February 27 @ 11:05:55 EST
Topic: Illegal Immigration News in the US
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 "If you don't allow people to use the banking system, the money will still go, but it will build up a transfer infrastructure that terrorists can then use," Martin said.
Rep. Eliot L. Engel (D-N.Y.), who leads the Western Hemisphere subcommittee of the House International Relations Committee, plans to hold hearings about remittances, which he said needed to be formally integrated into the U.S. banking system. "We should stop pretending that they're not there," he said.
Engel says the U.S. needs to standardize the wire system, linking the Fed to foreign central banks so that people can transfer money "without having to sneak around or do it on the sly."
February 26 2007
By Molly Hennessey-Fisk
Los Angeles Times
Topics: Banks assisting illegal immigrants, Bank of America Boycott, Money Transfers, Federal Reserve Bank,
"You cut down transaction costs, make it easier to do, and it helps everybody," Engel said.
The Fed offers a competitive exchange rate and charges banks 67 cents for each wire transfer to Mexico. After banks add their own fees, it usually costs customers $2 to $5 per transfer, regardless of the amount sent.
Private wire services usually charge more and add fees for larger transfers and for claiming the money in Mexico. The average cost of wiring $300 to Mexico from the U.S. was $10.40 last year, when 65.8 million of the transfers were made, according to a Bank of Mexico report.
McQuerry estimates Directo a Mexico saves its customers about $3.7 million annually.
Directo a Mexico proved popular at Mitchell Bank in Milwaukee, which remade itself as "Wisconsin's immigrant bank" during the last seven years to cater to an increasingly Mexican customer base. The bank offers the first two wire transfers free, then charges $2.50 for each additional wire — $4 for customers without accounts at the bank.
Monthly wire transfers average about 200, totaling $200,000, said bank Chairman James Maloney. He credits Directo a Mexico with attracting 10% to 15% more customers a month.
New customers include Jose Chavez, 52, an accountant and real estate investor who immigrated to Milwaukee from Mexico illegally in 1983 and later became a citizen. Chavez opened an account at Mitchell Bank last year after he heard about Directo a Mexico, and used it to open one for his brother in his hometown in the state of Michoacan.
Every two weeks, Chavez wires $100 to his mother, saving about $8 a transfer, and he recommends the program to illegal immigrants. "They have a hard time establishing credit here, for obvious reasons," he said. "But the reality is they're here and they are not going anywhere"
Maloney has fielded criticism recently for serving illegal immigrants. But he defends Directo a Mexico, which he supplemented with mortgage loans targeting immigrants.
"We find ourselves in a neighborhood that is heavily migrants. Our job is not to determine what other people's status is," any more than it's the responsibility of a grocery or department store, Maloney said. "These people live and work in our neighborhood. It's our job as a community bank to provide them services."
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