The Challenges of Banking on the U.S.-Mexico Border

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On the latest ABA Banking Journal Podcast, Ignacio Urrabazo talks about the unique challenges of banking on the U.S.-Mexico border. A nearly half-century veteran of banking, Urrabazo is president and CEO of Commerce Bank in Laredo, Texas, a subsidiary of IBC.

The requirements of the Bank Secrecy Act pose a significant challenge for his bank due in part to the interconnected nature of the border region economy and in part to a cash-intensive market where Mexicans shop on the Texas side with hard dollar currency. “Every officer in the bank is doing due diligence and talking to customers and making sure we are doing the right thing,” says Urrabazo. “Our international officers go to Mexico and check to make sure they are legitimate businesses over there. Everyone is a BSA officer, even though we have one designated one.”

Distinguishing between issues of immigration and trade, Urrabazo also expresses concern about the threat of closing border entrances. Noting that 14,000 trucks cross the border at Laredo each day — carrying $265 billion worth of merchandise last year, with much of the trade infrastructure financed by Commerce Bank — he says a border closure “wouldn’t be a recession; it would be a depression for us. . . . It would be a catastrophe. It would affect our bank directly.”

Urrabazo also discusses his efforts to increase diversity in banking, how excessive regulation has hindered bankers’ ability to serve lower-income customers and how Commerce Bank meets the needs of Spanish-speaking clients in its 95% Hispanic market.

99 episodes available. A new episode about every 5 days averaging 19 mins duration .