Pub. 5 2015 Issue 4

M E XICO IS ARIZONA’S MOST IMPORTANT TRADING PART- NER. IN 2014, EXPORTS TO MEXICO GENERATED $8.6 BIL- LION FOR OUR ECONOMY. THIS MARKS A 124% INCREASE IN EXPORTS FROM ARIZONA OVER the past decade, and economists project that Arizona’s share of cross border-trade will only continue to grow. State and federal lawmakers must do everything they can to help Arizona businesses expand their exporting ability, which in turn creates jobs and grows our economy. This is clearly an economic opportunity that we can’t afford to miss, but overregulation of banks along the border threatens to cut off access to critical financial services for the Arizona businesses that drive our growth in exports. Over the past year, Arizonans who own and operate cash- intensive businesses along our Southern border have raised serious concerns about access to banking services. Major banks in border towns have shuttered their doors and closed accounts for longstanding businesses. In Nogales, Douglas, and other areas with significant cross-border commerce, as many as half of the major bank branches have closed or are considering downsiz- ing. These closures have forced hundreds of Arizona ranchers, farmers, agricultural workers, and other businesses to search for alternative banking services for cross-border transactions. When asked about these closures, several major banks cited the burden of complying with complex regulations governing cross-border banking. Banks near Mexico are targets for heavy regulation in part because they help businesses and individuals deposit and transfer billions of dollars across the border each year. Among other banking laws, these transfers are subject to anti-money laun- dering regulations and new Remittance Transfer Rules. This translates into layers of additional federal oversight and reporting that these banks must comply with – and explain to customers – in order to bank businesses on the border. Unfortunately, many banks are deciding simply to close their doors rather than do business in this regulatory climate. Cross-border banking does pose legitimate national security concerns, particularly along our Southern border. Each year, drug cartels alone attempt – too often successfully – to launder billions of dollars in illegal profits through banks and sham busi- nesses across the border into Mexico. The Mexican government has struggled in recent years to build a security infrastructure ca- pable of stopping the flow of laundered money into Mexico. The federal government has an obligation to protect Arizonans from cross-border financial crime and to ensure our border is safe and secure. Our security, however, should not come at the expense of legitimate Arizona businesses. Regulators have begun to recognize the need for greater flex- ibility in cross-border banking regulations. On June 16 of this year, the Federal Deposit Insurance Company (FDIC) held an educational workshop in Nogales to examine banking access in communities along the Arizona border. This workshop covered a wide range of border banking issues, including how to comply with anti-money laundering regulations. I, along with the other members of the Arizona Congressional Delegation, applaud the FDIC for engaging directly with Arizona banks and businesses to help them navigate a balance between compliance with anti- money laundering regulations and meeting the banking needs of the local community. The FDIC workshop was a good start, but Washington needs to do more. I regularly talk with Arizona bankers and business owners about the challenges they face, and we agree that regula- tors shouldn’t just work with the affected border community. They should also work to improve the overarching regulatory climate and do more to ensure access to banking services on the border, especially in areas where there are few if any alternatives. This is why I’m working with the House Appropriations Com- mittee to include language in the Financial Services and General Government (FSGG) Appropriations bill to direct the Financial Crimes Enforcement Network (FinCen) to examine the impact of anti-money laundering regulations – including increased moni- toring and issuance of recent guidance to United States financial institutions – on access to banking services in communities along the border. I will continue to work with my colleagues on both sides of the aisle to ensure that financial regulators understand the full effect of new regulations on border communities in Arizona, and find commonsense solutions to ensure that Arizona businesses have access to the banking services they need to grow and succeed. Arizona has an unprecedented opportunity to grow as a leader in exports in the coming decade. Arizona businesses have what it takes to compete and successfully turn export opportunities into sales that create jobs and strengthen our economy. Access to banking services is a vital part of that success. We must ensure that the regulations necessary to combat money laundering don’t jeopardize legitimate border businesses. I will continue to work closely with Arizona banks and businesses to ensure that Arizona continues to grow and lead in the Southwest. w Border Businesses Deserve Secure Accessible Banking BY U.S. REPRESENTATIVE KYRSTEN SINEMA U.S. Representative Kyrsten Sinema is an American politician and the U.S. Representative from Arizona’s 9th congressional district, first elected in 2012. She is a member of the House Financial Services Committee. 18 www.azbankers.org