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Friday, June 18, 2004

Cash flow to Mexico is a focus for Fox

Cash flow to Mexico is a focus for Fox

Cash flow to Mexico is a focus for Fox
Pat Doyle, Star Tribune
June 18, 2004 MIGRANTMONEY0618


When the people in business suits leave offices in downtown Minneapolis at the end of the day, an army of janitors takes their places at night. Many are Mexican, many are living here illegally.

One of them, a woman who calls herself Irma, has been cleaning in a high-rise building for more than a year and says she sends $150 --nearly a third of her take-home pay -- every two weeks to help support a child in Mexico. She came to Minnesota on the advice of relatives who assured her that she could find a decent job here.

"I'm very thankful to this country," she said Thursday from her apartment in south Minneapolis before heading to work. "Without this country, I wouldn't have anything."

While some Americans bristle at illegal immigration, Mexican President Vicente Fox has lauded as heroes Mexicans working -- legally or illegally -- in the United States and sending some of their earnings back home. Mexico hauls in more money from its expatriates than from tourists. Only oil sales pump more foreign cash into the Mexican economy.

In the Minnesota that Fox visits today, Latin American immigrants send an average of $1,877 a year to their home countries, more than that sent by migrants living in Florida, Texas, Arizona and New Mexico, according to a 2004 estimate by the Inter-American Development Bank in Washington, D.C. Mexico was by far the single biggest recipient nation.

Signaling the importance of the cash flow to his nation, Fox has set aside as much as an hour in his short visit today for a private meeting in the St. Paul Radisson Riverfront hotel with top executives from Wells Fargo, U.S. Bank, Citibank and Bank of America, according to bank and city officials. The meeting is expected to include discussions on ways to transfer money more efficiently.

"We were told we had to cut out some reserve time for the president and his schedule, which we did, and then suddenly we heard that he was probably going to have some one-on-one meetings with some bankers," said Tony Lorusso, director of the Minnesota Trade Office, which has been working on Fox's itinerary with the Mexican consulate in Chicago. "They said this came directly from the president's office."

Bank officials said they expect to talk about matricula consular, an identity card issued by Mexican consulate offices that enable otherwise undocumented immigrants to open savings or checking accounts for sending money back home. The bankers said they also hope to talk about financial vehicles for delivering money more cheaply and quickly from the workers to Mexico. The Mexican consulate in Chicago did not comment on the meeting.

Mexico is considering opening a permanent consulate in the Twin Cities. The nearest Mexican consulate is in Chicago. Demand for the cards is strong enough in Minnesota that the Chicago consulate periodically sends a bus to the Twin Cities to issue them.

The cards have created a paradox for United States policy makers. While opposing illegal immigration, the United States hasn't interfered with Mexico's issuance of identity cards that make it easier for illegal immigrants to live in America. The cards have been accepted for several years by the four large bank corporations with whom Fox is meeting, a tacit recognition that illegal Mexican immigrants have become a big market for the financial services business.

Still, Minnesota labor activist Mariano Espinoza says the cards haven't been fully accepted by some banks in smaller rural towns.

Hector Garcia, Wells Fargo's vice president of business development for emerging markets, isn't surprised that the average amount Minnesota migrants send to Mexico is higher than the average remittances from migrants in some southwestern states with larger Latino populations.

"The main reason we have had such a huge influx of immigration in the last several years is secondary migration," said Garcia, who is based in Minnesota. "They arrive in California and Arizona and Texas and they discover that the supply of their services is already very high, which means they get less pay and they're less welcomed. So they keep on moving north. And when they get here they get paid more and they can send more money back home."

The Inter-American Development Bank reported that 32 percent of immigrants it surveyed were illegal. The woman who calls herself Irma has a Mexican passport but no documents allowing her to live for an extended period in the United States. She and a friend and co-worker, who called himself Manuel, estimated that about 60 percent of those cleaning buildings in downtown Minneapolis are living here illegally, as they do.

They said about 50 workers clean the building where they work, and 30 are Mexicans. Irma and Manuel said they fear being deported if caught and asked that they not be identified by their real names for this story.

Espinoza, the labor activist, said employers make little effort to verify the documents of janitors applying for work.

"If they wanted to really check documents they could," he said. "But they don't because they really need them."

Irma said she is separated from the father of her three children and is helping to support one child living with her mother in Mexico. There was little work for her there.

Irma and Manuel don't have matricula consular cards to open bank accounts, and rely on Lake Street currency exchanges that cater to Mexicans to send money back home.

But banks can transfer higher amounts of money more cheaply for people with matricula cards. Wells Fargo allows Mexicans to move as much as $3,000 per day from U.S. accounts to accounts in Mexico for $10.

Wells Fargo has opened 400,000 accounts using matricula cards. An estimated 10 million Mexicans are living in the United States, but many of those living illegally are unaccustomed to using banks to send money home.

"People have programmed themselves to use the mom-and-pop remittance channels," Ayala said.

Fox has made the expansion of financial services to Mexican migrants a top priority, and the bankers see their St. Paul meeting with him as a chance to talk about new initiatives and to listen to his ideas.

"It's an opportunity for us to sit down with President Fox since he is in the Minneapolis market with the primary focus of providing financial services to Mexicans living within the United States," said Alice Perez, Hispanic market manager for U.S. Bank.

Pat Doyle is at pdoyle@startribune.com.

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