Remittance Disclosure Included in Financial Reform

From Appleseed:

With Congressional agreement on financial reform legislation, Appleseed’s Fair Exchange principles are now much closer to implementation in the remittance market. The Conference Committee agreement would benefit countless U.S. immigrants and their families and entire economies that depend on the flow of remittance dollars. The legislation includes important transparency requirements for remittance service providers that will help guarantee the safe and affordable transfer of money from immigrant workers to their relatives abroad.
 
Reflecting recommendations generated by Appleseed during years of research and advocacy, the legislation requires remittance providers to disclose vital service information prior to a transaction. Among the details to be provided in a written pre-transaction notice are the amount of currency that will be received by the designated recipient, the amount of transfer, any fees charged by the remittance transfer provider, and any exchange rate to be used by the provider for the transfer.
 
“These disclosures will help consumers ensure that their hard-earned wages go as far as possible in supporting the financial welfare of their families and themselves,” said Annette LoVoi, director of Appleseed’s Financial Access and Asset Building Program. “The benefits of improved remittance transparency will be felt around the world.”
 
The legislation also requires a receipt showing the amount to be received, the promised date of delivery, identifying information about the recipient, and a statement containing the senders’ rights regarding error resolution. Further, the act requires disclosure of contact information for the remittance provider and the state and federal government regulators for complaints, and the disclosures will be available in the foreign languages most commonly used by remittance customers.
 
“Informed consumers are responsible consumers,” said Appleseed Executive Director Betsy Cavendish. “And remitters are a huge population. Market transparency will help people protect their earnings, creating economic stability from the ground up.”
 
Remittance flows from United States, which reached an estimated $47 billion in 2008, play integral roles in both poverty alleviation abroad and asset building in the U.S. About 80 percent of remitters earn less than $30,000 per year, so even small savings are vital to both sides of a remittance transaction, and up-front disclosures will not only allow for comparison shopping, but likely drive down costs through increased competition.
 
As a nearly decade-long advocate for increased transparency in the remittance market, Appleseed applauds the efforts of lawmakers to help transform our carefully crafted proposals into action. To view Appleseed’s full body of work on international remittances, including our Fair Exchange pilot program and Congressional testimony, visit www.appleseednetwork.org.

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