M&T Bank Halts Banking With Cuba
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| M & T Bank |
The potential for huge fines from the federal government has reportedly prompted Buffalo-based M&T Bank, the 30th largest bank in America, to close its bank account with the consulate of Cuba in Washington, DC.
An Obama administration spokesman said it has tried to convince M&T to keep the account open.
Cuba, however, is on the U. S. list of nations said to be engaged in terrorist activities and banking is regulated for such nations under the Office of Foreign Assets Control of the U. S. Department of the Treasury.
Rules are strict and penalties severe if a bank makes a mistake.
Last year, the Dutch bank ING Bank NV agreed to pay $619 million to settle U.S. government allegations that it moved money illegally through banks in the United States in violation of sanctions against Cuba, Iran and other countries.
Swiss banks UBS AG and Credit Suisse AG and Britain's Lloyds TSB Bank PLC and Barclays Bank PLC have paid hundreds of millions in similar fines involving Cuba transactions.
Meantime the Cuban Consulate announced they cannot find another bank willing to take its business and will have to suspend consular services such as passport and visa processing in the U.S.
This might impact the annual 350,000 Cuban Americans who, since 2009, when the Obama administration relaxed rules to allow Cuban Americans, many of whom escaped Cuba in refugee boats, to visit family members in "people-to-people" travel with a licensed tour guide to the island.
A decade-old U.S. economic embargo prohibits general tourist travel to Cuba and most U. S. commercial transactions with the island are forbidden, much like freedom of speech, religion, and peaceful assembly are forbidden to the people who live in Cuba.
The Obama administration does not believe the decision by M & T was politically motivated. M&T, headquartered at One M&T Plaza, in downtown Buffalo, has reportedly divested its diplomatic accounts in recent years. Cuba was the last remaining one.
Cuban-American critics of Cuba's communist government accused it of seeking to use the banking issue to pressure the Obama administration into relaxing U.S. sanctions against the prison state island.
"The Obama administration has already weakened many sanctions and it should not fall for this blatant emotional blackmail," said U.S. Representative Ileana Ros-Lehtinen, a Republican from Miami.
Cuba's ruling regime, critics say, may not be able to afford a drop in tourism, which is run by the military and which has become a mainstay of its cash-strapped country.
Lifting the ban entirely on U.S. tourists traveling to Cuba would put tens of millions of dollars into the hand of Cuba’s ruling regime.
With $84.4 billion in assets, $66.6 billion in deposits and $63.7 in loans and leases, 725 branches in eight states and Ontario and 16,000 employees, M&T Bank has been profitable every quarter since the late 1970s.
Warren Buffett's Berkshire Hathaway owns almost 6 percent of the shares. Robert G. Wilmers is the longtime M & T chairman.