[Congressional Record Volume 150, Number 110 (Wednesday, September 15, 2004)]
[Extensions of Remarks]
[Page E1641]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




TRANSPORTATION, TREASURY, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT, 
                                  2005

                                 ______
                                 

                               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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