Treasury keeps rules allowing acceptance of Mexican ID

Thursday, September 18th 2003, 12:00 am

By: News On 6

WASHINGTON (AP) _ The Treasury Department said Thursday it will leave in place rules that allow financial institutions to accept Mexican identification cards, called matricula consular, which often are used by undocumented immigrants to open bank accounts.

The decision, which extends to all foreign-issued identification, is considered a victory for immigration and Latino groups that have protested efforts to prohibit use of the identification card as anti-immigrant and anti-Hispanic. Financial institutions, too, had opposed any change in the rule.

Opponents say the cards are too fraud-prone and pose a risk to homeland security. Immigration opponents also have said the card acts as de facto amnesty for illegal immigrants.

The card is issued by Mexico's consulates to its citizens living abroad and shows the date of birth, a current photograph and the address of the card holder. Many of the cards have been issued to Mexicans in the United States, including those in the country illegally.

Cardholders have used them to open bank accounts, turn on utilities, check out library books, get drivers' licenses or other basic services in some communities and states.

Treasury decided that under the existing rules, financial institutions bear the risk of failing to have an effective policy on what types of identification to accept. That risk acts as incentive for the institutions to adopt policies that will stem fraud, but still gives them flexibility to accept identification most used in their communities.

``When an institution decides to accept a particular form of identification, they must assess risks associated with that document and take whatever reasonable steps may be required to minimize that risk,'' the agency said in a statement.

The department still would hold financial institutions accountable for the effectiveness of their customer identification programs. And the agency will notify financial institutions of problems with specific identification documents that are accepted.

The department's decision comes after Homeland Security Secretary Tom Ridge told The Associated Press that banks and communities that accept the card for identification do so ``at their peril'' because the cards are not fraud-proof.

Although Mexico is improving the card's security, the FBI reported this summer that the cards remain vulnerable to fraud.

But Steve Bartlett, president of the Financial Services Roundtable, said the Treasury decision is the right one because ``there never was a valid argument to deny'' acceptance of the cards.

``This is a triple win for rational thought. This is a win for the matricula, a win for the economy and a win for our close ally Mexico,'' said Bartlett, whose organization represents the 100 largest financial services companies.

Comment was not available from the Mexican Embassy in Washington. Many Washington offices were closed Thursday because of Hurricane Isabel.

Under pressure from Congress and the Justice Department, the Treasury Department decided to review recently implemented rules for financial institutions on identification they can accept from people opening accounts. The rules were mandated by the U.S. Patriot Act, passed into law after the Sept. 11, 2001 terrorist attacks.

The Mexican IDs still are under review by a White House-led panel.

Mark Krikorian, executive director of the Center for Immigration Studies, said the decision would strengthen calls in Congress to ban or restrict acceptance of the card.

``It allows a de facto creeping amnesty to take place without the White House having to sign its name to it,'' said Krikorian, whose center supports restricting immigration.