Profitwise News and Views

December 2003 Special Edition

Financial Assimilation of Immigrants Conference

From the Editor
December 2003 Special Edition (PDF,227KB)

Afternoon Session
Terry Meek
Julie A. Williams

Terry Meek
Open Access to Workforce Assimilation
Ms. Meek is the Executive Director of Proteus, Inc., the Migrant and Seasonal Farmworker(s) grantee for the state of Iowa. She has served in that capacity since 1983, and worked for the organization since its inception in 1979. Ms. Meek served as President of the Association of Farmworker Opportunity Programs from 1995 to 1996, and served on the Executive Committee as an officer or at-large member. She is a frequent trainer at the Department of Labor supported conferences, and also at conferences supported by regional associations and individual grantees. She holds a B.A. from the University of Iowa with majors in Social Work, Spanish and Education.

Ms. Meek explained the role of Proteus. Proteus is an Iowa-based nonprofit corporation that serves low-income people by providing services to promote self-sufficiency through personal and social growth. Proteus primarily serves migrant and seasonal farmworkers and their families, but also serves refugee, immigrant and other minority populations. Proteus offers a wide range of services including: childcare, English as a second language training, workplace safety, pesticide use training, homebuyer assistance, and food pantry operation.

Ms. Meek pointed out that each year several thousand migrant farmworkers arrive in Iowa, and that most are from southern Texas. These Latino families work on farms from sunrise to sunset, and most Iowans are unaware of their presence or the impact they have on Iowa's agricultural economy. The farmworkers are what Ms. Meek called "the true example of the working poor." Most migrant farmworkers are employed in seasonal jobs that offer few, if any, benefits. Most of their earnings are spent on transportation costs from their home bases, usually southern Texas, and the states where the jobs are located. They have a strong sense of family and family unity, and they seek the "American dream" and financial security for their children.

Ms. Meek went on to highlight numerous newspaper headlines from around the country regarding the various issues facing Iowans and the growing Latino population. Articles have drawn attention to issues such as the need for English proficiency among job seekers, a declining Iowa work force, and minority students becoming the majority in many areas of the state. The media articles have focused on the issue that immigrants fill a need in the declining workforce for low-skilled, low-paying jobs, and are reversing the declining Iowa population in general in many small towns and cities.

These "new Iowans," as Ms. Meek refers to them, require initial development aid, that will have positive returns to Iowa's economy and communities. The training opportunities for youths and adults in English language proficiency, basic skills education and GED preparation, school drop-out prevention, occupational skill training, and financial literacy education. Immigrants are eager to learn English and participate in education and job training when it is available. Ms. Meek noted that school children who take part in adjusted curriculums that meet their needs, are more likely to remain in school, raising the quality and skill level of the state's labor force. Financial education orients immigrants to the nation's secure and beneficial banking system.

Julie A. Williams
The USA PATRIOT Act
Ms. Williams is the managing examiner of the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) unit of the Federal Reserve Bank of Chicago. Ms. Williams directs a team of specialized examiners responsible for assessing compliance with the anti-money laundering regulation including the BSA, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act, and Office of Foreign Assets Control requirements. Prior to joining the Federal Reserve Bank of Chicago, Ms. Williams served as a National Bank Examiner with the Office of the Comptroller of the Currency, and later worked as an associate with a bank consulting firm.

Ms. Williams' team specializes in money-laundering legislation, which can affect sectors of the immigrant population that lives and works in the U.S., and which has new emphasis in the post-September 11 environment. The USA PATRIOT Act was passed by Congress on October 26, 2001. Ms. Williams pointed out that for most bankers, money-laundering provisions have changed little. However, what regulators "expect banks to do to comply with the legislation is very different from what was expected in the past." Bank compliance has changed and financial institutions must now observe the Bank Secrecy Act/Anti-Money Laundering (BSA/AML), USA PATRIOT Act and Office of Foreign Assets Control requirements.

Ms. Williams explained that Title III of the USA PATRIOT Act, dealing with the International Money Laundering and Abatement and Anti-Terrorist Financing Act of 2001, was incorporated into the BSA. This Act traditionally covered drug trafficking, tax evasion and fraud. Today it also includes money laundering, terrorism and identity theft. The Customer Identification Program (CIP), Section 326 of the Act, enumerates the types of identification required from customers to open an account. "Examiners still expect banks to have 'know your customer' practices and policies in place, but [these] are not required by legislation."

The Act was published (and went into effect) on May 9, 2003. It was issued jointly by the Treasury Department, the Federal Reserve Board, the Office of the Comptroller of the Currency, National Credit Union Association, Office of Thrift Supervision and the Federal Deposit Insurance Corporation. Full compliance by the financial industry is required by October 1, 2003.

Ms. Williams went on to explain the requirements of CIP and what banks are required to do to comply:

Verify the identity of any persons opening an account; maintain a record of information used to verify the customer's identity; determine whether the customer is on any list of known suspected terrorists or terrorist organization provided by any government agency.
Banks management needs to decide, based on their business lines, location, and business practices, what customer identification programs are appropriate, meaning banks will have different programs depending on their assessment of risk.
Defining what is meant in the CIP: Persons--individuals or businesses. Account--a formal banking relationship, not an occasional wire transfer, or purchase of a money order.
There are four types of information required from customers to open an account: name; street address; tax identification number or other number from a government-issued identification document; and the date of birth of the individual.
The regulation specifically states that the information must be presented prior to opening an account. Banks have time after an account is open to verify the information. Verification is required "within a reasonable amount of time."
Record Retention: CIP requires banks to establish procedures to maintain records, methods and results of any documenting verification; identification information for five years after an account is closed; all documents relied upon for verification to open an account for five years.
Notice Requirements: financial institutions must inform customers of their identification requirements, "in a reasonable manner," including lobby notice, website postings, and written disclosures.
CIP must be incorporated into all aspects of a bank's BSA/AML program and approved by the bank's board of directors. Banks need to be aware that implementation of procedures may require changes to daily operations and additional training for staff.

Ms. Williams addressed the topic of banks accepting the Matricula Consular (identity card issued by the Mexican government to its nationals living abroad) as appropriate identification. Ms. Williams stated that the Matricula includes a "...number from a government-issued identification card," and is therefore allowable.

In closing, Ms. Williams stated that the Anti-Money Laundering legislation and the USA PATRIOT Act, are designed to balance homeland security and effective banking regulations for anyone who lives and works in the United States, regardless of citizenship. She added that banks cannot carry the burden alone, and regulation and enforcement in other segments of the financial industry are needed.¹

Notes:
¹The views expressed are those of the speaker and do not necessarily represent views of the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of Chicago.