How Mexico's Banks Thrive Domestically While Aiding Migrants Abroad
Mexican banks post record profits from consumer loans, up 9.2% YoY. Concurrently, Finabien launches 100K debit cards in the U.S. for migrants, offering lower remittance fees & avoiding a 2026 tax, plus safety from U.S. deportation policies.
Mexico's financial landscape is currently presenting a curious dichotomy, where the nation's largest banks are reaping unprecedented profits even as the government rolls out new initiatives to make cross-border transactions more accessible for its citizens abroad. This juxtaposition reveals a deeper narrative of economic forces at play, with consumer credit fueling domestic financial powerhouses and innovative financial tools seeking to streamline the lifeline of remittances from north of the border.
In a recent revelation from Mexico's National Banking and Securities Commission (CNBV), a staggering surge in consumer credit has propelled Mexican banks to record-breaking profits. From January to May of this year, these institutions collectively amassed an astonishing 126 billion pesos (approximately $7 billion USD, based on current exchange rates). The driving force behind this financial bonanza?
A robust 9.2% increase in credit card, personal, and payroll loans compared to 2024. What's more, the concentration of this wealth is notable, with the eight largest banks in the system cornering 79% of these burgeoning profits. While such figures underscore the financial strength and stability of Mexico's banking sector, they also raise questions about the underlying economic pressures and consumer behavior that fuel this borrowing spree.
Yet, as traditional banks celebrate their windfall, another significant financial story is unfolding that directly impacts millions of Mexican families and highlights the innovative spirit emerging from the public sector. Financiera para el Bienestar (Finabien), a Mexican public institution, is embarking on an ambitious program to issue 100,000 debit cards in the United States, specifically designed to facilitate the secure and cost-effective transfer of remittances back to Mexico.
This initiative takes on particular urgency given the impending 1% tax on remittances originating from the U.S., set to take effect in January 2026. Finabien aims to pre-empt any potential disruption or increased burden on migrants by offering a compelling alternative to traditional remittance services. Rocío Mejía Flores, the head of Finabien, underscored that this system not only offers significantly lower commissions—charging migrants approximately $3.59 USD per transfer for an average monthly amount of $400, a notable reduction from the $7 or more charged by many remittance houses (with plans to further reduce it to $2.99)—but also provides a crucial layer of protection for migrants.
In a candid acknowledgment of the realities faced by many Mexican nationals in the U.S., Mejía Flores highlighted that the Finabien card can help migrants avoid "an eventual arrest, in the context of U.S. government deportation policies". The ability to conduct transactions without physically visiting a consulate or remittance house, where Immigration and Customs Enforcement (ICE) agents might be present, offers a significant advantage and peace of mind. The card, which allows migrants to hold up to $20,000 USD while in the U.S. and use it for purchases, represents a strategic move to safeguard financial flows and support the well-being of Mexican families.
This endeavor is not merely about financial efficiency; it's also a socio-political maneuver designed to protect a vital economic artery for Mexico. Remittances, primarily from the U.S., constitute a significant portion of Mexico's economy, with approximately $2 billion USD transferred annually through cash means alone. While the Finabien card system currently accounts for a modest $20 million USD of this, the agency projects that this amount could quadruple, urging migrants to embrace the new system before the 2026 tax takes hold.
The contrast is striking: a thriving banking sector profiting from domestic consumer borrowing, and a government agency striving to ensure the continued flow of foreign earnings by mitigating risks for its citizens abroad. This dual narrative paints a vivid picture of Mexico's complex economic landscape—one where growth is found both in traditional financial services and in innovative solutions addressing the unique challenges and needs of its globalized workforce.
The "Mexicanist" newsletter will continue to monitor these fascinating trends, exploring how these two seemingly disparate financial stories converge to shape Mexico's economic future.
