Illegal immigrants wiring money have an amigo: the Fed

Dubbed Directo a Mexico, the Federal Reserve-sponsored service allows customers without Social Security numbers to wire money through the Fed system to Mexico's central bank at little cost. In September, the Fed expanded the remittance program by allowing immigrants, legal or not, to open accounts at participating banks and credit unions in the U.S. or Mexico. About 27,000 transfers are made through the program each month.

The program has attracted the attention of conservative immigration activists and members of Congress, who say financial institutions shouldn't cater to illegal immigrants.

Rep. Brian P. Bilbray (R-Solana Beach), who leads the congressional Immigration Reform Caucus, said Directo a Mexico and programs like it should be stopped and that participating banks were "profiteering from illegal immigration."

Bilbray is also targeting Bank of America Corp., which this month announced plans to offer credit cards to immigrants without Social Security numbers, drawing complaints that the nation's largest retail bank was underwriting illegal immigration.

"It's illegal for a landlord to do it, it's illegal for an employer to do it, and it should be illegal for financial institutions to do it," Bilbray said.

Bank of America has said that it complied fully with all banking and anti-terrorism laws governing customer identification, which permit the use of forms of ID other than Social Security numbers.

Bilbray said legislators were working on proposals that would prevent financial institutions such as the Fed and Bank of America from catering to illegal immigrants, and are calling on the Bush administration to address the issue.

Elizabeth McQuerry, an Atlanta-based assistant vice president for the Fed's retail payments office, said Directo a Mexico wasn't breaking any laws. She said the program complied with the Patriot Act, the Bank Secrecy Act and other laws against money laundering. Customers must provide identification -- a consular identification card or other picture ID -- and banks regularly check the documents' authenticity, she said.

Fed staffers developed the program with counterparts at Mexico's central bank after President Bush announced it with then-Mexican President Vicente Fox in 2003. About 150 banks and credit unions participate, including 20 in California, McQuerry said.