Treasury Upholds Banks’ Discretion to Accept Consular IDs

Treasury decision
In a victory for supporters of the Mexican matrícula consular, The Department of the Treasury announced that it would not seek regulatory changes which would restrict the ability of financial institutions to accept consular identification cards.

In Treasury’s announcement¹ regarding its recent notice of inquiry² on its previously finalized regulation³ relating to the identification requirements for financial institutions in section 326 of the USA PATRIOT Act, the Department declared that it “…found no new information presented that was not considered prior to issuing the final rules. Accordingly, Treasury will not seek changes to the final rules to prohibit the acceptance of foreign issued identification documents, such as consular IDs, or to require that financial institutions maintain photocopies of identification documents.”

In its rationale for maintaining the current regulation, Treasury noted, “Rather than dictating which forms of identification documents financial institutions may accept, the final rule employs a risk-based approach that allows financial institutions flexibility, within certain parameters, to determine which forms of identification they will accept and under what circumstances.”

The Department also reported in its press release that, of the 23,898 comments received on the identification card issue, 19,770 (82.73%) requested no change in the final regulation.

Background
The matrícula consular is an official identification card issued by the Mexican government through Mexican consulates throughout the U.S. to Mexican citizens living abroad. As a result of critics’ claims that it legitimizes the presence of undocumented immigrants in the United States and allegations that the cards are easy to falsify and obtain fraudulently, the acceptance of the matrícula by U.S. financial institutions has become controversial. Calling it the “illegal alien ID card,” a small but vocal group of members of Congress have pushed to restrict its acceptance by the government and financial institutions.

In a highly unusual move, the Treasury Department recently re-opened for comment a regulation which it had earlier finalized regarding the ability of banks and financial institutions to accept the matrícula consular as a form of identification for a person seeking to open a bank account. That earlier regulation was promulgated in accordance with section 326 of the USA PATRIOT Act, which requires financial institutions to verify the identity of any person seeking to open an account. The regulation allowed banks and other financial institutions to decide which documents they would accept as proof of identity before opening a bank account, which meant that if a financial institution chose to accept consular identification cards, it would be permitted to do so. However, the Treasury Department reopened the regulations for comment, presumably leaving open the possibility of amending the regulation to restrict the banks’ discretion to accept the consular cards or to eliminate that discretion altogether.

During the period for comment, the pro-immigrant advocacy community demonstrated resounding support for the continued use and acceptance of the matrícula consular. Advocates rallied a campaign of letter-writing to the Secretary of the Treasury and comments supporting the matrícula consular and keeping the Treasury regulation in its current form.

USCCB/MRS position
MRS has argued that taking away banks’ ability to accept consular identification cards and thus denying undocumented immigrants access to bank accounts would cause them great harm by making them more vulnerable to robbery, exploitative lending practices, and exclusion from the benefits of a credit record. MRS has also asserted that prohibiting officials from accepting consular IDs as a form of identification would cast the undocumented even deeper into the shadows of society and prevent them from identifying themselves to the appropriate authorities when reporting crimes or other public emergencies.

In response to allegations that the Mexican consular cards are insecure, MRS and other pro-immigrant advocates have pointed out that in fact the matrícula consular is extremely secure because the Mexican consulates which issue it have strict policies for verifying the identity of the applicant and incorporate various anti-counterfeiting security features into the card itself.

In a July 31, 2003 letter to Treasury Secretary John Snow, Bishop Thomas Wenski, Chairman of the USCCB Committee on Migration wrote, “The USCCB strongly opposes any amendment to the final rules that would limit the acceptance of consular identification cards by financial institutions. Our interest in this matter stems from our deep concern for the well-being of immigrants, including undocumented immigrants…Acceptance of consular identification cards by financial institutions helps to protect the rights and dignity of the undocumented by providing access to some of the essentials of living and working with dignity in the United States.”

Notes

1. Department of the Treasury Press Release, September 18, 2003
2. Federal Register, Vol. 68, No. 126, July 1, 2003, pp. 39039-39041
3. Federal Register, Vol. 68, No. 90, May 9, 2003, pp. 25090-25113