We Mean Business. Illinois Business.
 
 

Working immigrants aided by U.S. financial institutions
By KERRY L. SMITH

   Mexican immigrants working in the U.S. have grown accustomed to surrendering large percentages of their paychecks to send money back home to their families.

   Annually, Mexicans working here send more than $9 billion home to support their loved ones. But traditionally, too much of their total wages has gone to third-party check cashing outlets that got a big cut of the dollars and cents.

   That was then, this is now. Thanks to a new form of identification known as the consular ID card, U.S. credit unions, banks and other entities are making it safer and less costly to wire money south of the border.

   Welcome to IRnet, the International Remittance Network. The World Council of Credit Unions Inc. premiered the service two years ago, and more than 150 credit unions are already offering it to working immigrants.

   World Council financial services manager Dave Grace says a number of Illinois-based credit unions are among those putting IRnet to the test.

   "It's essentially a tool that allows credit unions to reach out to their growing immigrant markets," Grace said. "The United States today has the largest percentage of immigrants working here since the 1930s. Credit unions are seeing the make-up of their customers change, and they're asking, 'Who is our market and how can we serve them?'"

   With the advent of the consular ID card and its use through programs such as IRnet, Grace said a Mexican working in the U.S. can wire up to $1,000 back to his native country for as little as $10. Before this ID was around, the working immigrant's process of keeping the dollars he needed and sending the remainder back to his family was both costly and potentially dangerous, Grace said.

   "What typically happened before the wiring service was that an individual would receive his paycheck on a Friday, go to a check cashing storefront that Friday night and pay 3 percent to 5 percent or more to receive the cash," he said. "Next, he'd move over one window and spend another 20 percent to 30 percent sending the remainder of the paycheck back home. And as he left the building with his portion of the cash, he might get mugged."

   The World Council continues to study a list of financial institutions across the country that are piloting IRnet. Grace said the feedback is strongly positive.

   "On average, the costs for sending money via IRnet (as compared to sending it through a check cashing storefront) are 75 percent less," Grace said.

   Jack Teausant, president of Financial Plus Credit Union in Northern Illinois, said the organization's Mendota branch has a high percentage of Hispanic customers.

   "These customers were paying exorbitant fees to wire cash back to their families," Teausant said. "Now they're able to come into one of our locations and send the money for as little as $8 per transaction. It has made a huge difference in the earning power of these working immigrants, particularly in light of the economy right now. Being able to take home and wire more of their wages has been a great thing."

   IRnet and similar wiring services are also gaining popularity in more than 40 countries in Latin America, Asia, Africa, Australia and Europe, Grace said.

   Vicki Ponzo, senior vice president of membership services for the Illinois Credit Union League, says immigrant identification cards and the privileges they provide are among several examples of ways financial institutions are making the effort to serve the growing ethnic diversity of customers today.

   "Our credit unions in Illinois are just starting to get involved in programs like this one," Ponzo said. "We're also hiring bilingual tellers, creating audio response systems in Spanish and English and creating other means through which to serve a growing minority population. I think it's great. I've been in the League for 25 years and have seen credit unions continue to step up to the plate in terms of looking for ways to serve the changing faces of their customers."

   The consular ID card, Ponzo said, has additional use beyond enabling a working immigrant to wire money out of the U.S. For those who are not yet U.S. citizens, possessing one of these identification cards permits the individual to open a checking and savings account at a local bank, establishing credit in the process.

   For years, U.S. financial institutions had been refusing service to Mexican immigrants because the institutions could not verify the workers' identities.

   Bank of America spokesman Jeffrey Bierer said that after the Sept. 11 terrorist attacks, the Mexican government feared that the estimated 3.5 million Mexican citizens working in the U.S. who had no identification could be mistaken for terrorists. Mexican government leaders began lobbying the U.S. government to recognize the consular ID card as a valid piece of identification.

   Although the U.S. government has not yet agreed to accept the consular ID, the card is gaining acceptance on a municipal level. The city of Chicago, for example, recognizes it, as does a growing tally of banks and credit unions across the country.

   "If we're to be successful and continue to grow, we're going to have to become the bank of choice for the Hispanic community," Bierer said. "It's a significant market now, and it's growing every year."

   By 2005, the number of Hispanics is expected to surpass the number of blacks as the largest minority group in the U.S.

   "The consular ID card is a form of identification that the private sector finds acceptable," said John Byrne, senior counsel and compliance manager at the American Bankers Association.

   San Francisco-based Wells Fargo was the first bank to accept the consular ID; in six months, it opened more than 30,000 bank accounts for previously undocumented immigrants.

   The U.S. Immigration and Naturalization Service warns that the ID should not be mistaken as a safety net for illegal immigrants.