NCLR Report Calls For Reform Of $45 B Latino Remittance Market.

A new analysis of remittances – the money sent by immigrant workers in the U.S. to family members abroad – by the National Council of La Raza (NCLR), the largest national Latino civil rights and advocacy organization in the U.S., affirms that reforming the $45 billion Latino remittance transfer market could help put Hispanics on a path toward greater prosperity and wealth. NCLR’s report, Reforming the Remittance Transfer Market, builds on earlier studies by the Multilateral Investment Fund and Pew Hispanic Center which found that lowering wire transfer company fees by just five percentage points could generate annual savings of $1 billion for Latino households here and abroad. In its report, NCLR calls for policy reform to reduce the fees and hidden costs associated with wire transfers and for stronger efforts by banks and credit unions to reach Latino consumers with their low-cost remittance services.

“Workers and their families are needlessly losing money because wire transfer companies charge outrageously high transaction fees – often exceeding 20% of each transaction – which are not clearly spelled out. These practices take advantage of people who work hard and are helping to support their families,” said Janet Murguia, NCLR President and CEO. “We urge Congress to act now to protect these workers and their hard-earned dollars.”

Reforming the Remittance Transfer Market points out that one key reason for high fees is a lack of competition from banks and credit unions. Seven in ten Hispanics (70%) in the U.S. who send remittances use a wire transfer company. Only 11% remit funds through a bank and 2% through a credit union, despite the fact that these financial institutions provide a wider menu of services at a lower cost.

“Almost half of remittance senders do not have bank accounts, yet studies show that they send an average of $100 to $300 a month to family members. It is not only the right thing to do, but also the smart thing, for more financial institutions to offer low- or no-cost remittance services as part of checking or savings accounts, which would help these workers enter the financial mainstream,” noted Murguia.

“To be fully part of America’s ‘ownership society,’ Latinos must retain ownership of the money they earn so they can save, build assets, and participate in the American dream through homeownership, a college education for their children, and a comfortable retirement,” said Murguia. “Market reforms in the remittance transfer industry can serve as the gateway for Hispanic workers to open bank accounts and use other financial services that can help them build wealth.”

To view report CLICK below (Adobe Acrobat Reader required):

http://www.nclr.org/files/31291_file_WP_Economic_Mobility_remittance_FNL.pdf