JPMorgan Chase and Bank of America have scrapped low-cost services that allowed Mexican immigrants to send money to their families across the border. The Spanish bank BBVA is reportedly exploring the sale of its unit that wires money to Mexico and across Latin America. And in perhaps the deepest retrenchment by a bank, Citigroup’s Banamex USA unit has now closed many of its branches in Texas, California and Arizona that catered to Mexicans living in the United States and stopped most remittances to Mexico as it faces a federal investigation related to money laundering controls.It is difficult to see how regulators will not view Bitcoin dealers in a manner similar to money exchange operators and require them to keep detailed records on their Bitcoin buyers and sellers. That doesn't mean a black market in Bitcoin won't exist, but it will be extremely limited and dangerous to deal in.
Regulators say the banking system was being exploited by terrorists and drug lords seeking to launder money. While they have not banned banks from engaging in higher-risk businesses like money transfers to certain countries, they acknowledge that banks must now invest significantly more to monitor the money moving through their systems or face substantial penalties.
But the government’s efforts to root out illicit activity have effectively put the banks into a law enforcement role, industry experts say...
The pendulum has swung so far, participants in the industry say, that regulators are pushing banks out of some activities considered beneficial to the broader economy.
“The money transfer business has become the whipping boy of regulators who want to show how tough they are,” said Paul S. Dwyer Jr., chief executive of Viamericas, a money transfer company based in Maryland with a large focus on Mexico.
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JPMorgan Chase and Bank of America have scrapped low-cost services that allowed Mexican immigrants to send money to their families across the border.
ReplyDeleteI am a Chase customer who sends money to my folks in Mexico. I was using the low-cost service provided by Chase until they shut down the service back in November of 2013. Whether I have alternatives or not available is not the point. The point is that regulations are not created to help people but to constrain the market for the benefit of a few, be it other competing businesses or lazy bureaucrats. I was screwed because regulators in DC found it funny to put the screws on my bank.