BANKING ON IMMIGRANTS INDUSTRY OK WITH MEXICAN ID.

Byline: Lisa Friedman Washington Bureau

With potentially billions of dollars at stake, banks and credit unions are fiercely protesting proposed U.S. Treasury Department regulations that would bar undocumented immigrants from opening checking accounts.

Hundreds of financial institutions, including ones throughout Southern California, have bombarded the Treasury Department with letters and e-mails fighting any new regulations that would prohibit them from accepting the Mexican identification card known as ``matricula consular.''

The lobbying blitz has infuriated immigration hard-liners who accuse the banking industry of caring more about their bottom lines than national security.

``They have a single vested interest, and that interest goes little beyond the billions of dollars flowing through their banks,'' said Rep. Elton Gallegly, R-Thousand Oaks, who also called the lobbying ``self- serving.''

Advocates of the matricula consular, however, called the lobbying an encouraging sign that financial institutions are finally recognizing immigrants' economic clout.

``They're making a lot of money, because they're letting people invest to buy a house, to send their kids through college,'' said Rep. Grace Napolitano, D-Santa Fe Springs. ``I would hope it would be of major interest to Wall Street and other areas. That's a lot of capital they can invest.''

The foreign-issued IDs are about to become even more controversial in California with Gov. Gray Davis signing legislation this month to give driver's licenses to undocumented immigrants, who number about 2 million in the nation's most-populous state.

The cards, issued through 10 Mexican consulates statewide, are among the state-approved IDs that immigrants can use to obtain driver's licenses.

The Mexican government has issued matricula cards since 1871 but redesigned them last year in response to heightened U.S. security concerns. The new cards are commonly accepted by banks, law-enforcement agencies, and local and state governments.

About 9,000 new cards are issued each month in the greater Los Angeles region, while about 4,000 monthly are issued in San Bernardino County.

Opponents argue that widespread acceptance of the matricula consular amounts to a back-door amnesty of illegal immigrants, since anyone in the United States legally ostensibly has a visa, passport or other form of U.S.-issued identification.

Supporters say the card merely helps illegal immigrants lead everyday lives - opening bank accounts, for example, rather than stuffing money under mattresses.

Treasury officials said they will decide, most likely this month, whether to continue allowing banks to accept the matricula. Of the more than 34,000 comments the agency received regarding the proposed rule changes, about 82 percent favored retaining matriculas as an acceptable form of identification.

The agency did not tabulate how many comments came from members of the industry. This newspaper's own review found thousands of comments from more than 300 different banks, credit unions, insurance groups, financial consultants and investor services.

Among those who rang in on the side of allowing the matricula were the California Bankers Association; Quaker City Bank, based in Whittier; Boeing Employees Credit Union; Jackson Federal Bank, based in Brea; and the California Credit Union League.

Treasury spokesman Taylor Griffin acknowledged a large percentage of comments from the financial companies. ``This regulation affects financial institutions,'' he said. ``So it's not surprising to see there is a significant amount of input from that sector.''

Financial institutions argue that they don't require customers to be U.S. citizens, and making such a requirement could be discriminatory.

``Before financial institutions are asked to make such a distinction, the Treasury and other proponents of the proposal should offer some substantial evidence that permanent residents in this country who are not citizens pose a qualitatively greater terrorism threat as compared with residents who are U.S. citizens,'' wrote Leland Chan, general counsel for the California Bankers Association.

According to the American Bankers Association, between 85 and 150 of the nation's 9,000 banks accept matriculas. The industry has not tabulated the financial gain from accepting the cards, nor have officials quantified how much the industry stands to lose if the regulations change.

But Miriam Galicia Duarte, a spokeswoman for Wells Fargo & Co. in its Los Angeles office, said the bank has opened 100,000 new checking and savings accounts since it began accepting the matricula card in 2001.

Wells Fargo was the first bank to accept the cards as a primary form of identification; it announced 30,000 new accounts in the first six months of the policy.

``It's obviously good business for Wells Fargo,'' Duarte said, adding, ``The matricula consular identification has also allowed thousands of Mexican nationals to leave the costly and risky cash economy behind and enter the mainstream of financial services so they can achieve the American dream.''

The matricula debate comes as Census Bureau reports and recent studies highlight California's ever-growing immigrant population.

A study released this month by the Washington, D.C.-based Center for Immigration Studies found that 44 percent of California residents in 2000 were born in Mexico, an increase over the 38 percent level in 1990.

``That just goes to show the diversity and why people come to the United States - for a better life,'' said Rep. Joe Baca, D-San Bernardino. He called the trend a positive one.

Dan Stein, president of the Federation for Immigration Reform, called it troubling. ``These are outstanding percentages, and they clearly reflect massive illegal immigration,'' he said.

Overall, the report found that America's immigration population grew by 11.3 million during the 1990s, exceeding what was seen at the height of the Ellis Island immigration wave.

Lisa Friedman, [phone]

lisa.friedman(at)langnews.com