Transportation, Treasury, and Independent Agencies Appropriations Act, 2005

TRANSPORTATION, TREASURY, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT, 2005 -- (Extensions of Remarks - September 15, 2004)

SPEECH OF HON. MAXINE WATERS
OF CALIFORNIA
IN THE HOUSE OF REPRESENTATIVES
TUESDAY, SEPTEMBER 14, 2004

The House in Committee of the Whole House on the State of the Union had under consideration the bill (H.R. 5025) making appropriations for the Departments of Transportation and Treasury, and independent agencies for the fiscal year ending September 30, 2005, and for other purposes:

Ms. WATERS. Mr. Chairman, I rise in strong support of the Oxley-Frank-Kolbe-Pastor-Hinojosa amendment to H.R. 5025, the FY2005 Treasury Transportation Appropriations bill. The amendment would strike bill language, section 216, that prohibits the Treasury Department from enforcing or even publishing its recent regulations implementing the
USA PATRIOT Act provisions requiring financial institutions to take reasonable steps to identify their customers.

This bipartisan Amendment is supported by the White House, the Chair and Ranking Member of the Financial Services Committee and virtually every major association within the financial services industry including the American Bankers Association, Consumer Bankers Association, Bankers' Association for Finance and Trade, America's Community Bankers, Financial Services Roundtable, the Credit Union National Association and the Securities Industry Association.

The Amendment would strike language adopted in subcommittee that would prohibit the Treasury Department from spending funds to administer and enforce regulations implementing Section 326 of the USA PATRIOT Act.
Specifically, this language would prohibit the Treasury Department from implementing regulations issued on May 9, 2003, that permit financial institutions to accept matricula consular identification cards as part of a valid customer identification program.

Mr. Chairman, while I have objections to many aspects of the USA PATRIOT Act, I support the Section 326 requirement that financial institutions must establish "reasonable procedures" for verifying the identity of customers seeking to open a new account. Section 326 enhances the ability of financial institutions to detect and prevent both money laundering and the financing of terrorism by requiring institutions to develop comprehensive procedures for verifying customer identity. Yet section 216 of H. R. 5025 would make it impossible to achieve this important objective, and, thus, it should be stricken from the bill.

If the Oxley-Frank-Kolbe amendment is not adopted, this appropriations bill could drive large sections of the U.S. population to underground financial services providers and thereby weaken the government's ability to monitor and enforce our money laundering and anti-terrorist financing laws. Adopting this amendment is critical to ensuring that our government has the ability to track terrorist finances.

Mr. Chairman, while those who are hostile to the Mexican matricula consular card want to transform this issue into a
debate about immigration, this issue is not a debate about immigration. Rather, it is a debate about whether we will preserve the ability of our government to work with financial institutions to fight terrorism by tracking terrorist financing. The language in the bill doesn't simply prohibit the use of matricula consular cards-the bill prevents the Treasury Department from enforcing ANY type of identity verification under this important regulation.

The Oxley-Frank-Kolbe amendment enables banks and credit unions to recognize matricula consular cards as identification for financial transactions. The language in the bill does not merely discourage the acceptance of matricula consular cards. It, in effect, prevents their acceptance by financial institutions. The language in the bill effectively prohibits the Treasury Department from enforcing the USA PATRIOT Act's customer identification provisions that are designed to combat money laundering and terrorist finance.

If Section 216 remains in this bill, the Treasury Department would be prohibited from even telling financial institutions that they must verify the identity of their customers. Mr. Chairman, all of us know that it becomes more difficult to track tracking terrorist financing whenever more people turn to the underground financial system. Why would we want to adopt legislation that will make it easier and more common for people to opt out of the transparency of the mainstream financial system?

Mr. Chairman, denying foreign nationals access to the U.S. banking system will undermine the ability of U.S. law enforcement, regulatory, and economic agencies to do their jobs, since individuals will likely turn to other, less transparent, less regulated, and more expensive methods to transmit funds. We should be encouraging immigrants to use the mainstream financial system to hold and transmit funds. Allowing financial institutions to choose to recognize matricula consular cards as part of their customer identity verification program is sound public policy. I urge all my colleagues to support the Oxley-Frank-Kolbe Amendment.

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