In 2012, we reported about the scandal involving U.S. banks laundering narcotics money going back to Mexico. The scandal caused bankers to get scared. And so, they claim to be pulling back from their cross-border services, hurting everyday Mexicans.
Hmm. The story at the link does show big U.S. banks pulling back, and goes deep into the hassles faced by Columbia professor when they found their accounts had to be shut down. But is it really affecting everyday people?
There do not seem to be any signs that people in the U.S. need to queue up in order to send money to Mexico. Absent a shortage of cross-border money-transfer services, then, one would expect restrictions on money transfers to show up in higher prices. Fortunately, the World Bank records the price of transferring money to Mexico. And they report (as a % of the sum transferred):
There is seasonality, which does make it seem that prices have recently ticked up ... but in context they have not. Moreover, the cost of moving money via non-banks has gone down monotonically, with only a recent bump. This is not surprising, since it would seem weird for a 2012 scandal to cause prices to rise in 2015.
An article from the New York Times says, “While immigrants say they have not noticed broad price increases from companies like Western Union, industry experts say higher costs are inevitable with fewer banks acting as middlemen for money transmitters.” Meaning that maybe costs will rise in the future, perhaps, but they have not yet.
So maybe the new regulations will impact everyday Mexicans. But not yet. And to be honest, probably not ever.