Sunday, June 15, 2014
moving to mexico -- banking turmoil
I have made my living giving advice. And, if I do say so myself, most of it has been quite good. But certainly not all of it.
And it is that "not all" category that is the topic of today's lesson. What seemed to be a clever idea to me has turned out to be one of those roads best left not taken.
When I first moved to Mexico, a fellow blogger told me about a great banking program. Banamex USA offered a no-cost checking account to those of us advanced in age.
I arranged to have my three monthly retirement benefits electronically deposited in my Banamex USA account. I could then use my computer to transfer amounts to my Banamex account in Melaque -- in pesos.
That process had the advantage of no transfer fees, and I bought pesos at the bank's exchange rate. Even better, I could then withdraw pesos from any Banamex ATM without incurring any additional fees.
It was such a good deal that I have touted it several times on these pages. But all good things come to an end, it appears.
The first funeral toll sounded last October. I received a letter informing me that new American banking regulations meant the termination of the program that let me transfer pesos electronically.
What I could once do on my my computer, I now needed to do on the telephone. It was obvious some sort of reporting form was being completed. The tip-off was a new question: "What do you intend to do with this money?"
The other shoe dropped yesterday. While sitting on the roof terrace (enjoying a newly-opened view -- the one at the top of this post), I received an email from the blogger who originally recommended the Banamex USA account. He had just received a registered letter from the bank informing him that his account would be closed on 30 June.
At first, I thought the bank might be concerned about new reporting requirements for expatriate accounts that go into effect on 1 July. It may turn out that is the reason. A lot of small fish are being hurt as an unintended consequence of the Obama administration's attempt to catch major tax dodgers. But people with that type of money are not very likely to being using a retiree bank account with Banamex USA.
But I am not certain that The Nanny State Up North is solely the cause of these closed accounts. Last month, The Wall Street Journal carried a story about Banamex USA's legal travails. Stories that include Justice Department subpoenas, fired bank executives, and closed operations are not exactly good for business.
And that may be what this all about. There may soon be no more Banamex USA business -- at all.
Whatever the reason, a lot of American expatriates in Mexico are going to have to do some quick work to transfer the money in their Banamex USA account to another bank in The States. And, in these days of stricter regulation, they are about to find out that opening a new account is as difficult as getting a visa to North Korea.
I say "in The States" because a lot of retirement funds will not directly deposit in a foreign bank. At least two of my retirement benefits can be deposited only in an American bank.
And that is the reason I am writing this post. Some of you may have relied on my advice in opening a Banamex USA account. If you have not yet received a registered letter of pending closure of your account, you may want to consider taking preemptive action. I am.
I have not yet received the termination letter. But, if the account closes on 30 June, I have just over two weeks to find a new bank.
For me, that will be simple. When I sold the Salem house, I almost closed my last American bank account. I didn't, though, because my landlady prefers my monthly rent in a dollars check.
So, all I need to do is transfer my automatic credit card payments and my retirement direct deposits to that bank. The trick, of course, will be the timing. There is a high possibility that my July direct deposits will be returned to the senders.
What about the remainder of the deposits in my BanamexUSA account? I will have them transferred in pesos to my Banamex account here in town. For some reason, I suspect that is not what Congress had in mind when it passed the 2010 law that is the subtext of this hubbub.
Banamex USA may very well have brought all of this on itself. Or it may be because of the Obama administration's penchant to be seen as "doing something." Or it may be a combination of both.
For me, though, it may be a smart move to streamline my finances. Cutting out one bank makes sense.
The next question is whether this is a one-off deal -- or is it going to be that much more difficult for American expatriates to run their financial affairs in Mexico?
That story is yet to be written. My Mexican friends would tell me to simply enjoy the view.
And I will.