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Kai Ryssdal: Secretary of State Hillary Clinton is in Mexico today where she said an insatiable appetite for drugs here has been fueling a lot of the drug violence along the border. Back in Washington, meanwhile, a Senate committee took up another breach in the border today, one that allows billions of dollars in drug money to enter the U.S. every year. From the Americas Desk at WLRN, Marketplace's Dan Grech reports.
DAN GRECH: They're called stored-value cards. They look like your run-of-the-mill gift card, a piece of plastic with a magnetic strip. But they're being used by drug runners and money launderers as an almost invisible way to smuggle cash.
Charles Intriago is a former federal prosecutor and founder of Money Laundering Alert.
CHARLES INTRIAGO: They're so small. I mean, just think, you could be holding what looks like a credit card in your hand, and it could be holding a million dollars. And you sneak them in some suitcase.
Drug cartels at the Mexican border use the cards to smuggle an estimated $8 billion to $24 billion a year. Though stored-value cards can sometimes be used to draw money out of ATMs, the cards are not considered legally a monetary instrument or cash.
INTRIAGO: Nobody has the authority to ask you to take your wallet out and report how much money may be implanted in a stored-value card. So it's easy to move dirty money.
The Senate committee wants to close that loophole. One proposal is to amend the Bank Secrecy Act to declare stored-value cards a monetary instrument. But the $300 billion-a-year, prepaid card industry would resist that change. Terry Maher is General Counsel for the Network Branded Prepaid Card Association. He says existing bank regulations have enough teeth to police stored-value cards.
TERRY MAHER: We don't want to see these products misused for money laundering or terrorist financing. So we want to work with the regulators and law enforcement to minimize the chances of that happening.
Other ways to limit smuggling would be to prohibit stored-value cards from being used at ATMs or after you cross the border into Mexico.
I'm Dan Grech for Marketplace.