NOGALES, Ariz. — Federal regulations meant to stop drug-cartel money laundering are threatening Southern Arizona’s produce industry — and leaving many cross-border importers unable to find banks willing to do business with them.
In the past two years, Bank of America and Banamex USA, a Citigroup subsidiary, left town, while Chase shuttered one of its two branches here. The banks have also closed thousands of accounts along the border, leaving many companies scrambling.
The closures are affecting businesses of all kinds, but the produce industry is being hit the hardest due to its business model, which involves frequent money transfers between the United States and Mexico that set off red flags meant to identify criminal activity.
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