Visa has suspended all international transactions for cards issued by CIBanco following allegations of money laundering by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The payment network’s decision was announced suddenly on Sunday and took effect Monday afternoon, affecting all CIBanco international transactions, including those made with the CICash Multicurrency card.
CIBanco, a Mexican commercial bank with over US $7 billion in assets, confirmed that Visa made this unilateral decision without prior coordination and before the 21-day grace period typically allowed by the Treasury Department for such actions. The bank was among three Mexican financial institutions sanctioned last Wednesday by the U.S. Department of Treasury, accused of laundering millions of dollars for drug cartels. These sanctions prohibit certain transactions with U.S. banks.
In response to the FinCEN announcement, Mexico’s National Banking and Securities Commission (CNBV) implemented a “temporary managerial intervention” at CIBanco on Thursday, aiming to protect the bank’s creditors and depositors. CIBanco has assured clients that their funds remain secure and can be reimbursed through the bank’s branch network in either the original currency or local currency.
Impact on CIBanco’s Business
However, S&P Global Ratings has terminated its contract with CIBanco and withdrawn its ratings data. The agency previously downgraded the bank to “CreditWatch with negative implications” and warned that CIBanco faces significant risks, including potential inability to access financial transfers with U.S. and domestic institutions, which could limit business sustainability over the next year.
Several businesses have also cut ties with the bank, including Mexican real estate trusts Terrafina and Fibra Inn, which announced plans to remove CIBanco as their trustee. CIBanco, originally established in 1983 as a currency exchange house called Consultoría Internacional (CI), transformed into a multiple banking institution in 2008.
For more information, please visit the original article on Mexico News Daily.
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