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Anti-matrícula proposal defeated; financial institutions can continue accepting consular ID's
Immigrants' Rights Update, Vol. 18, No. 6, September 21, 2004

In a vote of 222 to 177, the U.S. House of Representatives passed a bipartisan amendment, H.Amdt. 754,  introduced by Reps. Michael Oxley (R-OH), Barney Frank (D-MA), Jim Kolbe (R-AZ), Ed Pastor (D-AZ), and Rubén Hinojosa (D-TX) to strike the so-called Culberson amendment that would have prohibited the Treasury Dept. from implementing regulations that allow financial institutions to accept matrícula consular identification cards as part of a valid customer identification program under the USA PATRIOT Act.

On July 22, 2004, the House’s Committee on Appropriations voted in favor of an amendment to the Transportation, Treasury, and Independent Agencies Appropriations Act (HR 5025) for 2005, which was introduced by Rep. John Culberson (R-TX) (see “House Appropriations Committee Votes against Matrícula Consular,” Immigrants’ Rights Update, Aug. 9, 2004, p. 1).  While the anti-matrícula consular provision introduced by Culberson passed by one vote in the Committee on Appropriations, it did not survive the floor debate on the Appropriations bill that took place on Sept. 14, 2004. 

Oxley framed the debate at the outset when he said:

Our amendment will strike ill advised language adopted in the Committee on Appropriations that, if allowed to remain in the bill, would prevent the Treasury Department from enforcing regulations implementing customer identification provisions in the USA PATRIOT Act that are critically important to combating money laundering and disrupting the financing of terrorism. . . . The Bush administration and the Treasury Department have registered their strong support for this amendment, arguing that denying access to the mainstream financial system serves only to drive consumers into the underground financial economy, making it virtually impossible to track their financial activity and frustrating the government’s efforts to enforce anti–money laundering and antiterrorist financing laws.  In the words of [Treasury] Secretary Snow, if the section my amendment seeks to strike becomes law, “it will be a step backwards in the financial war on terror.”

Culberson, however, argued that his amendment would not have been necessary if the regulations adopted by the Treasury Dept. were sufficient to address the intention of the PATRIOT Act to accurately identify and track individuals opening bank accounts.  The “Treasury rule says that any foreign government–issued document that evidences nationality, as long as it bears a photograph, is valid to open a bank account,” Culberson said.  “That is in complete violation of the PATRIOT Act.  So the regulation the Treasury Department adopted does not even meet the express letter of the law in the PATRIOT Act.  So we had no other choice but to cut off the funding to this regulation.” 

In response, Rep. Ed Pastor (D-AZ) called into question the motive underlying Culberson’s amendment, noting that it targeted only matrícula consular ID cards, which are used primarily by citizens of Mexico.  

Hinojosa, one of the cosponsors of the effort to strike the Culberson amendment, reiterated that the matrícula consular is secure and that financial institutions should be allowed to accept it as a valid form of ID for those wishing to open a new account.  He said that more than 160 counties, 1,180 police departments, 377 cities, 33 states, and 178 financial institutions currently support and accept the use of the matrícula consular “as a means to reduce crime and violence, improve the U.S. economy, and strengthen our line of defense against terrorists attempting to gain access to our financial institutions.” 

“The matrícula cannot be used for obtaining any citizenship benefits, such as work authorization, the right to vote or access to public benefits,” Hinojosa said.  “Rather, it enhances public safety and national security.”

Culberson and other opponents of the matrícula consular also raised national security concerns, stating that the FBI and Justice Dept. allege that “consular ID cards that foreign nationals would use to open bank accounts are widely known to be easily forged.”  Moreover, Rep. Dana Rohrabacher (R-CA) argued that allowing financial institutions to accept the matrícula consular “would make it easier for these banks to do business with illegal immigrants, and they would make a profit from it; but our country would be far less safe, and our children will be less safe if we do this.”

The two sides in the debate disagreed sharply as to whether the FBI and the Justice Dept. were for or against the acceptance of matrícula consular cards.  Culberson and others claimed that these agencies were opposed to the Oxley-Frank-Kolbe-Pastor-Hinojosa amendment, while the amendment’s proponents asserted that the agencies actually supported it.

To clarify the matter, Rep. Spencer Bachus (R-AL), a subcommittee chairperson of the Committee on Financial Services, explained that the section of the USA PATRIOT Act that Culberson’s amendment would affect—section 326—is not self-executing and requires the issuance of regulations.  The Culberson provision would prevent the Treasury Dept. from administering or enforcing regulations pursuant to section 326, thus effectively shutting down any implementation or enforcement of the provisions in that section.  Bachus further explained that the vice chair of the 9/11 Commission had recently testified before the House’s Committee on Financial Services and commended it for the passage of section 326, calling it the cornerstone of anti–money laundering efforts. 

In countering Culberson’s allegations that the FBI and the Justice Dept. were opposed to the bipartisan amendment to preserve the use of matrícula consular cards, Bachus presented a letter for the record written by Deputy Atty. Gen. James B. Comey and addressed to Speaker of the House Dennis Hastert.  The letter, dated Sept. 14, 2004, stated:

The Department of Justice fully supports the Administration’s current policy under the USA PATRIOT Act that requires banks and other financial institutions to establish reasonable procedures for the identification and verification of new account holders, which is set forth in regulations of the Department of the Treasury.  Therefore the [Justice] Department supports the Oxley-Frank-Kolbe amendment to H.R. 5025 that preserves these regulations. . . . The Department of Justice, including the FBI, continue[s] to work closely with the Treasury Department on this and other issues related to halting all financing of terrorists.

In the final roll call vote, 49 Republicans supported the Oxley-Frank-Kolbe-Pastor-Hinojosa amendment and 16 Democrats opposed it.  This legislative victory was a joint effort by financial institutions, immigrants’ rights groups, consumer groups, and many others who worked in coalition to defeat, once again, efforts to limit the acceptance of consular ID cards by banks, credit unions, thrifts, and other financial entities.


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