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WORLD DROP | CUBA OPENS FIRST AMERICAN BANK ACCOUNT | FLORIDA'S STONEGATE BANK EMBRACES

5/22/2015

4 Comments

 
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American travelers seeking visas for Cuba will no longer have to turn up laden with cash, after a bank in Florida agreed to open an account for the communist-led nation.

Cuba’s pared-down diplomatic mission in the US had been without a bank for a year and a half, after the previous provider, M & T Bank of Buffalo, stopped handling accounts for foreign governments. But this week Stonegate Bank of Pompano Beach, Florida, stepped in at the urging of the US government, which said in December that it was looking to repair ties with Cuba after a half-century of hostilities.

“We hope this is the initial step to normalize banking ties between the two countries, which will benefit American companies wanting to do business in Cuba, as well as the Cuban people,” said Dave Seleski, president and chief executive of Stonegate, a 10-year old bank which had $2.26bn of assets at the end of March.

The December rapprochement has already boosted overall arrivals to Cuba, which were up about 15 per cent over the first three months of the year, according to Cuba’s tourism ministry. Tourist travel by US citizens is still officially banned, but Americans now have a better chance of being granted permission to visit under a dozen existing categories, such as educational and cultural exchanges.

Airbnb, the San Francisco-based room-renting site, started offering places to stay in Havana and beyond on April 2, and has already seen about 500 hosts create listings. Searches for Cuba have outpaced Rio de Janeiro, Buenos Aires or Mexico City since then, according to statistics the company supplied to Adweek.

Mr Seleski said he hoped the reactivation of a checking account would “ease the burden” on Cuba’s diplomatic mission in Washington, DC, which had gone without US banking services since November 2013.

At the time, Cuba had complained that the US was required under its diplomatic treaties to ensure “full facilities for the performance of the functions” of its diplomatic missions and consular offices in the US.

But private banks had steered clear, fearful of the spiralling costs of doing business with a nation under economic embargo and also included on the US list of state sponsors of terrorism.

Cuba had been the last foreign government served by New York-based M & T, which is still awaiting regulatory clearance to merge with Hudson City Bancorp of New Jersey. If the deal — agreed upon almost three years ago — goes ahead as planned in October, it would seal the first big-bank tie-up since the financial crisis.

This week the US state department hosted a Cuban delegation for the fourth round of talks aimed at re-establishing diplomatic relations and reopening embassies. Since 1977, both countries have run missions on each other’s turf, both under the legal protection of the Swiss Embassies in Washington and Havana.
via financial times
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