By Matthew Monks
“These companies provide a valuable service to this community,” said state Sen. Jose Peralta (D-Jackson Heights) during a news conference on 37th Avenue. “They ensure that (immigrants) can buy food, clothing and pay rent for their loved ones back home.”He said he would call for a state Assembly hearing on the closures. Financial services giants J.P. Morgan Chase Manhattan and North Fork Bank are following the lead of hundreds of banks in California and Florida by ending their association with so-called money service businesses – or MSBs – which came under intense scrutiny when it was discovered that the businesses were used to wire cash to the hijackers just days before the Sept. 11, 2001 terror attacks. The banks have decided to close the accounts at the end of the month, although they have offered extensions to some money transfers. Hundreds of banks across the country severed their ties with the firms under new banking regulations in the USA Patriot Act, which required financial institutions to know their customers' identities.'This is a classic case of a witch hunt reminiscent of McCarthy era tactics,” said state Assemblyman Adriano Espaillat (D-Manhattan). “Post-9/11 hysteria has allowed the federal government to cast a blanket stereotype on this industry.”There are 28,000 MSB agents in the state, according to the state Banking Department. Most handle small transfers of $200 to $300 at a time. The department had no figures for how many transactions are handled in Queens.Alan Friedman, president and chief executive of La Nacional, which operates 30 MSBs in Queens, said immigrants rely on his business, which has accounts with North Fork and Bank of America, to wire funds to Ecuador and Colombia. “Not having a bank would put us out of business,” he said. The federal government's stringent rules would drive money transfers underground, he said. “It's a huge problem,” Friedman said. “The federal government will shoot themselves in the foot if they put licensed money transmitters out of business. The money is going regardless.”Charlotte Gilbert-Brio, a spokeswoman for Chase, said her company was working with its money transfer clients to find other banks. She would not say on the record why Chase was cutting its ties with the MSBs. North Fork representatives failed to respond to several calls for comment. Reach reporter Matthew Monks by e-mail at news@timesledger.com or by phone at 718-229-0300, Ext. 156.
