The U.S.-Mexico Border Is Becoming a Banking Desert

Sabrina Hallman’s seed business has operated out of warehouses a short drive from the U.S.-Mexico border since 1989. The Sierra Seed Co., which sells to commercial growers in Mexico, is well-known in her small Arizona town—as is Hallman, a former school principal who took over from her father as chief executive officer in 2007.

Three years later her bank was acquired, and its new owners cut off a line of credit her business had depended on for years. The decision was so unusual at the time that it even took Hallman’s local branch by surprise. They advocated to their new bosses on her behalf. “They said, ‘You don’t understand, we know this company. It’s solid,’ ” she recalls. But their good word wasn’t enough. The company did business on both sides of the border and therefore posed a money laundering risk the bank wasn’t willing to take. Rather than spend resources vetting and monitoring what it perceived to be a high-risk account—or face enormous fines for failing to do so—Hallman’s company had to go.