Federal Reserve Unwittingly Helps Illegal Immigrants

A service sponsored by the Federal Reserve is helping illegal aliens send money back home because it does not require them to have a Social Security number. The service, called Directo a Mexico, allows customers without Social Security numbers to wire money through the federal system to Mexico's central bank, enabling illegal aliens to send money home cheaply. Beginning in September 2006, the Fed has allowed immigrants (legal or not) to open accounts at participating banks in the United States or Mexico.

About 27,000 transfers per month are made through the program. Remittances sent to Mexico last year totaled $23 billion. The Fed-sponsored service charges banks 67 cents for each wire transfer to Mexico. Rep. Brian Bilbray (R-CA), head of the Congressional Reform Caucus, says those banks were "profiteering from illegal immigration" - something that lawmakers are now working to prevent, according to the Los Angeles Times.

A spokesman for the Federal Reserve says Directo a Mexico complied with the Patriot Act, the Bank Secrecy Act, and other laws against money laundering. Customers must provide a consular identification card or other picture ID, and banks regularly check for authenticity. The problem, as I've been able to discern, is that any Mexican national (regardless of legal status) can get a consular ID. The bottom line is that Directo a Mexico is a potential national security nightmare.