By Dion Rabouin
Sept 5 New York's financial regulator is urging
state chartered banks to accept municipal identification cards
such as the New York City card to help people on the margins of
the financial system to open a bank account.
The superintendent of the State Department of Financial
Services, Maria Vullo, sent a letter last week to leaders of the
New York Credit Union Association (NYCUA) and the New York
Bankers Association (NYBA), which confirmed receipt of the
While big banks have said that they support efforts to
extend basic banking services to millions of American households
with no savings or checking account, they are hyper vigilant
about protecting themselves against fraud and money laundering.
In recent years, regulators, including the New York
Department of Financial Services, have fined big banks hundreds
of millions of dollars for failing to adequately protect their
network from people looking to launder the proceeds of crime or
funnel money to banned groups.
As a result, most big banks do not accept the New York City
ID card, known as the IDNYC, as a primary source of
identification, even though their federal regulators and some
smaller banks have approved its use.
The IDNYC is a free identification card that has been
popular with immigrants and touted by New York City Mayor Bill
de Blasio as a way for people to obtain bank accounts.
Access to banking services "helps preserve income, leads to
savings and asset-building opportunities, and improves access to
affordable credit opportunities," Vullo wrote in the letter,
according to a source familiar with the contents. "Indeed,
access to banking services can improve the overall economic
well-being of all New Yorkers and the New York economy."
In its response, the NYBA said the Department of Financial
Services, like federal regulators, was leaving it up to the
banks to decide whether to accept the New York ID card for
opening bank accounts.
"Banks are committed to finding innovative ways to serve
underbanked communities and IDNYC may play a meaningful role in
that effort," according to remarks attributed to its president
and chief executive, Michael P. Smith.
NYBA is comprised of the commercial banks and thrift
institutions that engage in the banking business in New York
State. The organization's website states that its members have
aggregate assets in excess of $10 trillion and more than 200,000
New York employees.
Requests for comment from NYCUA were not immediately
(Reporting by Dion Rabouin; Editing by Alan Crosby and Leslie