Mexico Takes Control of Two Banks amid U.S. Money Laundering Allegations

Following allegations of money laundering by US authorities, Mexico's bank regulator took extraordinary action to temporarily take control of CIBanco SA and Intercam Banco SA in order to protect customers.

In a nation plagued by financial scandals, the allegations that the lenders were perhaps aiding in the money laundering of drug cartels sent shockwaves across the nation and sparked concerns about whether Washington might target other banks. The banking lobby in Mexico hurried to claim that the actions would not affect the financial system of the nation.

The National Banking and Securities Commission, referred to as CNBV, announced on Thursday that it is changing the management of CIBanco and Intercam to protect the interests of the institutions' depositors and customers, considering the possible repercussions of the actions declared by the U.S. Department of the Treasury.

In a statement, CIBanco promised customers that their money was secure under Mexican law and stated that it would assist with the intervention. In accordance with the laws governing financial institutions, they will always engage with authorities in the US and Mexico to resolve any possible issues that the CNBV and FinCEN may have found.

On Wednesday, Intercam refuted the allegations but did not promptly reply to a request for a comment.

The Financial Crimes Enforcement Network, known as FinCEN, from the U.S. Treasury has restricted specific financial transactions involving U.S. entities for CIBanco, Intercam, and brokerage Vector Casa de Bolsa SA. Since Vector does not handle deposits, it is not subject to this action as it is not classified as a bank. The orders will take effect 21 days after they are published in the U.S. Federal Register. As of now, those orders have not been posted on the register's website.

The regulator took action because of worries that the accusations might scare customers, but President Claudia Sheinbaum reacted angrily to the US actions, saying she has not seen any proof to back up the designations.