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The wallet is rather essential. Taking away his wallet would be very difficult for him, it is like taking away his dignity. Do most facilities prohibit the resident from carrying a wallet with just a little cash?

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Yes, its a liability problem. Let him know he can keep his essentials in the drawer? I know these things are difficult but probably the least of your worries at this point.
Possibly ask about an empty wallet if he throws a fit?
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Yes, it's a liability thing and facilities advise against carrying a wallet and/or money. Residents don't really need money in a wallet in their pocket once they're living there.

When my dad went into a nursing home he was very uncomfortable not carrying a wallet so I gave him his wallet minus anything he couldn't afford to lose and I tucked a $10 bill in there to make him happy. He had been there less than 5 hours when I got a call from him that he had lost his wallet and that money. From then on he didn't carry a wallet and I'd only give him a few dollar bills to carry with him (which always ended up lost). I never gave him more money than he could afford to lose but having some money on him made him feel better. It was a waste of money since it always got lost but my dad felt better having it on him.
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Plus if he plays Bingo, they will give him "Gold" coins. My mother just loves these 'gold' coins and stashes them in her eyeglass case which she keeps near her.

I mean, gees, what else could any person want? :)
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Let him keep the wallet, and a few pictures in it, with his name and room number in it. Nothing of value, please.
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Agree about keeping an empty wallet without valuables. I used to put money in my dad's drawer and he would watch me do it, then I would take it before I left without him seeing me. He forgot and we did the same routine each time I visited.
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