Waters urges Biden to advance financial access for the Caribbean

Chairwoman of the United States House of Representatives’ Financial Services Committee, Democratic Congresswoman Maxine Waters, on Wednesday dispatched a letter to President Joe Biden urging him to leverage the forthcoming dialogue at the Summit of the Americas to incorporate a key priority for Caribbean nations: financial access and inclusion, particularly to advance solutions to the harmful phenomenon of bank de-risking.

“Most of the Caribbean region has witnessed large financial institutions, both US and foreign, scaling back or terminating their relationships with respondent banks in the region, making it significantly more difficult to do business and obtain financial services,” wrote Chairwoman Waters.

“While the de-risking issue overlaps with the broader issues of digital inclusion and financial inclusion, resolving de-risking requires focused, proactive solutions implemented collaboratively with Summit nations,” she added. “I urge you to ensure that these issues, including access to correspondent banking relationships, are raised at the Summit and are incorporated as a permanent part of the ongoing Summit dialogues.”

Waters said the United States, leveraging the collaborative, ongoing dialogue afforded by the June Summit in Los Angeles, “should ensure that solutions, particularly to the phenomenon of bank de-risking, are advanced across the region.

“Due to an unfortunate mix of potential regulatory penalties, maturing anti-money laundering laws, lingering (and often inaccurate) negative perceptions, small populations and volumes of transactions, and low bank profits, Caribbean nations and their citizens have a diminished ability to engage in cross-border trade, to accommodate US tourists and their dollars, to receive funds from family abroad, to recover quickly from natural disasters and to thrive economically,” the congresswoman told Biden.

She noted that she recently led a delegation of US Congressional Members to the Caribbean, where she co-hosted the Caribbean Financial Access Roundtable with the Prime Minister of Barbados, Mia Amor Mottley.

Waters said participating in this event with the visiting Members of Congress were nearly a dozen Caribbean Heads of State (“many of whom will likely join you at the Summit”), along with financial institutions, the International Monetary Fund, the Caribbean Development Bank, the US Embassy in Bridgetown, and members of civil society.

“Our recent event built upon an earlier discussion I organized in 2019 where I brought together key stakeholders to build consensus around how to solve these pressing issues,” she said.

“At our roundtable, we successfully identified several concrete actions that can be taken to address de-risking,” she added, stating that they included providing technical assistance for legal and regulatory harmonization; supporting a consortium bank pilot project for the region; creating programs to encourage small- and medium-sized banks to offer correspondent banking services; and “level-setting” US and regional examiner understanding of Anti-Money Laundering (AML) enforcement.

Others are: Shifting how the US Department of State reflects the effects of narcotics trafficking, especially for transit countries; formalizing an annual US-Caribbean Banking Forum to discuss these issues; and creating a SWIFT-based AML audit directory.

“Further, a discussion of correspondent banking services would fit well under the Summit’s mandates related to security, justice and rule of law, sustainable economic growth, and even infrastructure/transportation,” Waters said.

As suggested by the Atlantic Council’s March 2022 report, “Financial De-Risking in the Caribbean: The US Implications and What Needs To Be Done,” she said this type of financial access is “as essential as a seaport, airport, or clean water.”

“This is why CARICOM leaders included the issue on their agenda for their meeting with Vice President Harris earlier this month,” Waters said.

She said while the de-risking issue overlaps with the broader issues of digital inclusion and financial inclusion, “resolving de-risking requires focused, proactive solutions implemented collaboratively with Summit nations.

“I urge you to ensure that these issues, including access to correspondent banking relationships, are raised at the Summit and are incorporated as a permanent part of the ongoing Summit dialogues,” the congresswoman told Biden. “Thank you for your consideration of this matter, and I look forward to a productive and engaging Summit.”