110th CONGRESS, LEGISLATIVE ISSUES A - Z
REMITTANCES
ISSUE: The U.S. Census Bureau has indicated that almost 12% of the U.S. population is foreign-born. Many of these individuals provide a constant flow of dollars back into their home countries that have enabled their family members to improve their standard of living. However, the potential impact of these remittance (wire transfer) inflows is weakened as a result of the exorbitant fees (up to 28 percent of the transfer) and poor exchange rates that are offered by existing wire transfer companies.
CUNA POSITION: CUNA supports congressional efforts to bring greater disclosures in the remittance market, and efforts to increase credit unions’ ability to serve a greater portion of the population with remittances services as a way to bring unbanked consumers into the financial marketplace. More than 200 U.S. credit unions already provide wire transfer services with more than 650 points of service since the introduction of IRnet (International Remittance Network).
OPPOSING VIEWS: Some Members of Congress are opposed to the expansion of service and greater disclosures of remittances, as they perceive it as aiding “illegal immigrants.” Additionally, banking trades are opposed to efforts by credit unions to offer remittance services to individuals that are non-members.
IMPACT ON CREDIT UNIONS: CUNA and WOCCU offer credit unions a remittance product called IRnet (International Remittance Network), that offers safe, reliable and affordable wire transfer services to over 40 countries worldwide. In contrast to many wire transfer businesses, credit unions can remit up to $1,000 to Mexico for as little as $10, with guaranteed, up-front rates on both the sending and receiving end. Additionally, those remitting funds to Mexico are granted a free, two-minute phone call to notify relatives of time, location and amount of the wire transfer.
Credit unions provide a safe, reliable and affordable alternative to predatory check cashers and wire transfer shops. CUNA strongly supports efforts to allow credit unions to offer remittance, money order and check cashing services to non-members. Credit unions would be able to reach out to unbanked populations, particularly Hispanic communities, and offer much needed financial services at reduced rates, introducing them to other mainstream financial services. Credit unions would then have an opportunity to educate and build trusting relationships with these individuals, encouraging them to join a financial institution so they have access to all financial benefits.
CUNA and the World Council of Credit Unions (WOCCU) have endorsed S. 31, as credit unions using the IRnet product are already in compliance with a majority of the provisions.
STATUS/OUTLOOK:
CONTACTS: Phil Drager, 202-508-6710, pdrager@cuna.coop.
Related Documents:
CUNA’s 7 Principles of Fair Dealing in Wire Transfers
Credit Unions and Remittances: An Alternative to Underground and High-Cost Transactions
February 15, 2005: Letter to Senator Sarbanes Endorsing S.31
February 23, 2005: Letter to Rep. Gutierrez Endorsing H.R. 928
February 23, 2005: Letters to Reps. Gerlach and Sherman Endorsing H.R. 749
March 8, 2005: Letter to Rep. Baca Endorsing H.R. 1003
April 26, 2005: Letter to Reps. Hastert and Pelosi Regarding H.R. 749
