California Conservative

Capitalism may be at the heart of the story, but the ramifications for American immigration policy are far greater.

BusinessWeek Online (BWO) reports: “America’s undocumented population is now seen as an untapped engine for growth. Over the past several years, big U.S. consumer companies like banks and mortgage lenders have decided that a market of 11 million potential customers is simply too big to ignore.”

Well, that’s just great. Substitute “undocumented” for illegal, and you might make this “target market” sound almost legitimate. Not that BusinessWeek would be biased. Although, reading their recent articles under the heading “Business Without Borders” ( “A Massive Economic Development Boom” — That’s what legalizing undocumented immigrants would unleash; Don’t Choke Off the Flow of Immigrants; Immigration Breeds Generations of Success), one might question their position.

To promote their case, BWO goes on to highlight an illegal immigrant family “doing business” in L.A. They laud them for working real hard ( “4p.m. to 2 a.m., six days a week” ), dishing out tacos and burritos “from their bustling streetside taco trailer.”

“The Valenzuelas (not their real name) bring in revenue well above the U.S. household average of $43,000, making them a solidly middle-class family that any U.S. consumer-products company would love to reach.

But Inez and Antonio aren’t your typical American consumers. They’re undocumented immigrants who live and work in the U.S. illegally.

When the couple, along with Esmeralda, crossed the Mexican border five years ago, they had little money, no jobs, and lacked basic documents such as Social Security numbers. Guided by friends and family, the couple soon discovered how to navigate the increasingly above-ground world of illegal residency. At the local Mexican consulate, the Valenzuelas each signed up for an identification card known as a matrícula consular, for which more than half the applicants are undocumented immigrants, according to the Pew Hispanic center, a Washington think tank. Scores of financial institutions now accept it for bank accounts, credit cards, and car loans. Next, they applied to the Internal Revenue Service for individual tax identification numbers (ITINS), allowing them to pay taxes like any U.S. citizen — and thereby to eventually get a home mortgage.”

Much of the problem is therein revealed: How can America have a credible immigration policy and laws on the books when, in reality, the “system” is set up to reward illegals for their behavior?

Knowing that the matrícula consular is an ID with dubious validity, why should the IRS hand out tax ID numbers to individuals with nothing but? These people shouldn’t be given the opportunity to get credit cards, open bank accounts, and take out mortgages.

Do anyone really think this practice sends out a message that America is serious about stopping the inflow of illegal immigrants? It’s not that difficult, really, to determine if someone is a legal U.S. citizen. Companies are, merely, looking the other way.

So did a Wells Fargo & Co. branch in the predominantly Hispanic neighborhood in northeast Los Angeles where they live. Having a bank account allows them to pay bills by check and build up their savings. Their goal: to trade up from a one-bedroom rental to their own home. Eventually, they also hope to expand their business by buying several more trailers.

Matrícula holders like the Valenzuelas are “bringing us all the money that has been under the mattress,” says Wells Fargo branch manager Steven Contreraz.

That’s what the banks said about Scarface, too.

In the movie (played famously by Al Pacino), he carried in the cash proceeds from drug sales by the bag full. With today’s strict compliance regulations, one wonders how banks are still able to accept cash deposits. Brokerages can’t because of federal concerns about money laundering.

Though, an easy way around this is evident: Open a bank account and write the brokerage a check.

“Wells Fargo has half a million matrícula accounts, a majority of them, they acknowledge, opened by unauthorized aliens who lack regular residency or citizenship papers. At the Valenzuelas’ branch, fully 80% of accounts are opened by matrícula holders. Blue Cross of California, whose parent, WellPoint Inc., is the nation’s largest health insurer, sells health insurance to matrícula holders from company-staffed desks set up inside Mexican and Guatemalan consular offices in the U.S. Sprint Corp. accepts such an I.D. for cell-phone contracts.”

And you wonder what’s wrong with the system?

Our current laws are working against each other. It’s a conflict of interests. And businesses, as always, are trying to capitalize on it.

When Wells and a half-dozen other banks got the green light from the U.S. Treasury in 2001 to accept the matrícula, the magnitude of the market opportunity wasn’t yet recognized, says Shelley Freeman, Wells Fargo’s regional president for Los Angeles, who helped develop the program.

It quickly became apparent. Largely via word of mouth in Hispanic neighborhoods, Wells Fargo has opened 525,000 matrícula accounts, which now represent 6% of the bank’s total. It opens 800 new accounts a day across the 23 states in which it does business. Wells expanded the program to a Guatemalan matrícula in 2002 and an Argentinian version in 2003. Last October, Colombia launched a pilot matrícula program; El Salvador plans to offer a similar I.D. this fall. Since few immigrants apply for the matrícula if they can legally obtain U.S. identity documents, immigration experts say, it’s clear whom companies are going after when they accept it.

If America is ever going to get serious about controlling illegal immigration, it needs to look not only at our porous borders but, just as importantly, the financial incentives (and practices) that keeps the people coming.

It’s too easy to slip in and, by all accounts (no pun intended), businesses and banks are complicit.

RELATED:
Chris Kelly has more on this story.

This entry was posted on Thursday, July 14th, 2005 at 5:59 am and is filed under California, Capitalism, Homeland Security, Immigration, Mexico. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.