The United States government effectively killed off three Mexican financial institutions by accusing them of laundering money for drug cartels and announcing a ban on transactions between them and U.S. banks.
Four months after the U.S. Department of the Treasury made public its accusations against the banks Intercam and CIBanco and the brokerage firm Vector, all three of the financial institutions have ceased to operate in Mexico.
Intercam was acquired by Kapital Bank, CIBanco sold off its fiduciary division before it went into liquidation and Vector’s assets were transferred to Finamex, another brokerage firm.
Jorge Arce, vice president of the Mexican Banking Association (ABM), acknowledged last week that the three financial institutions have ceased operations, and asserted that their exit from the Mexican market was completed in an orderly fashion and in a way that ensured their customers were protected.
“The entire process was very orderly,” Arce told reporters after leaving a banking industry event last Thursday.
He said that the Mexican authorities — which temporarily took control of the three financial institutions — had “worked very well” and “kept us informed” about what was happening.
“Everything landed the way it was meant to land,” Arce said. “The institutions no longer operate; their assets were transferred to other institutions. The customers were looked after and that’s what had to be done.”
The ABM official asserted that the “chapter” in Mexico’s banking history initiated by the United States’ accusations against Intercam, CIBanco and Vector is now over.
Arce said that the episode had taught the Mexican banking industry a lesson about the need to strengthen controls and establish a stronger culture of risk prevention.
Banks and the ABM need to “keep working” to “improve our standards,” he said. Banks need to remain vigilant, make sure they comply with international anti-money-laundering norms and understand the risks of the sector in which they operate, Arce said.
Intercam, CIBanco and Vector all denied the accusations the U.S. government leveled against them, and the Mexican government highlighted that the Trump administration didn’t provide any proof that they had broken the law.
In June, the U.S. Treasury Department said that its Financial Crimes Enforcement Network had determined that the three financial institutions had “played a longstanding and vital role in laundering millions of dollars on behalf of Mexico-based cartels and facilitating payments for the procurement of precursor chemicals needed to produce fentanyl.”
U.S. Treasury Secretary Scott Bessent said that “financial facilitators like CIBanco, Intercam and Vector” were “enabling the poisoning of countless Americans by moving money on behalf of cartels, making them vital cogs in the fentanyl supply chain.”
The U.S. government’s public accusations against the financial institutions came after the Trump administration had already designated six Mexican cartels as foreign terrorist organizations, beefed up security at the southern border with Mexico and conducted covert drone missions over Mexican territory to spy on drug cartels and hunt for fentanyl labs.
Despite the exit of the banks and brokerage firm from the Mexican market, Arce said that the Mexican financial system is operating normally and remains strong. He also said the sector is “well regulated.”
The United States’ unprecedented orders that effectively cut off Intercam, CIBanco and Vector from completing transactions with U.S. banks didn’t take effect until last Monday. However, even before they went into force, many customers reported problems sending money to Mexico from the U.S. and vice versa.
