[Congressional Record Volume 149, Number 96 (Thursday, June 26, 2003)]
[Senate]
[Pages S8732-S8734]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE (for himself, Mr. Schumer, Mr. Akaka, and Mrs. 
        Boxer):
  S. 1344. A bill to amend the Electronic Fund Transfer Act to require 
additional disclosures relating to exchange rates in transfers 
involving international transactions, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. CORZINE. Mr. President, today, along with my distinguished 
colleagues Senators Schumer, Akaka, and Boxer, I am introducing ``The 
Money Wire Improvement and Remittance Enhancement Act'' (The ``Money 
WIRE Act''), legislation that will protect consumers who send cash 
remittances through international money wire transmitters by providing 
them with increased disclosure of the exchange rate and service fees, 
as well as hidden costs, for those transactions. The legislation also 
expands access to mainstream money wiring, check cashing, and other 
important services for millions of the unbanked in America, 
particularly immigrants, through our Nation's credit unions.
  Every year, thirty million Americans send their friends and relatives 
$40 billion in cash remittances through wire transfers. The majority of 
these transfers are remittances sent to their native countries by 
immigrants to the United States. For these individuals, many of whom 
are in low-to-minimum wage jobs, sending this money only increases 
their own personal financial burdens--but they do so to aid their 
families and their loved ones.
  Unfortunately, these immigrants increasingly find themselves being 
preyed upon by the practices of some money wire transfer providers who 
not only charge consumers with an upfront charge for the money wire 
transfer service, but also hit them on the back end with hidden costs. 
Many of these charges are extracted when the dollars sent by the 
consumer are converted to the foreign currency value that is supposed 
to be paid out to the friend of the family member.
  This exploitation is especially pervasive in Latin American and 
Caribbean countries, where much of these types of transactions occur. 
According to the Multilateral Investment Fund and the Inter-American 
Development Bank, Latin American and Caribbean immigrants sent a record 
$32 billion to their home countries in 2002--a dramatic increase 
compared with $23 billion in 2001. Many of these dollars were used to 
pay for basic needs, such as food, medicine, and schooling, and to 
alleviate the suffering of loved ones during a difficult economic year.
  To bring this amount into even greater perspective, the remittances 
that flowed into Latin America and the Caribbean last year equaled 
roughly the amount of direct foreign investment that flowed into the 
region, and exceeded the amount of development aid to Latin America 
from all sources. For this decade alone, Latin America and the 
Caribbean could receive more than $300 billion. And experts believe 
that number is likely to grow significantly in coming years.
  These large cash flows have proven to be a powerful incentive for 
greed in the case of some wire transfer companies. Customers wiring 
money to Latin America and elsewhere in the world lose billions of 
dollars annually to undisclosed ``currency conversion fees,'' and other 
service costs.

[[Page S8733]]

  In fact, many large companies aggressively target immigrant 
communities, often advertising ``low fee'' or ``no fee'' rates for 
international transfers. But these misleading ads do not always clearly 
disclose the fees charged when the currency is exchanged.
  While large wire service companies typically obtain foreign 
currencies at bulk rates, they charge a significant currency conversion 
fee to their U.S. customers. For example, customers wiring money to 
Mexico are charged an exchange rate that routinely varies from the 
benchmark by as much as 15 percent. These hidden fees create staggering 
profits, allowing companies to reap billions of dollars on top of the 
stated fees they charge for the wire transfer services.
  Last year alone, immigrants who sent money to Latin America and the 
Caribbean paid approximately $4 billion in transaction costs to the 
money wire transfer companies that dominate this business. In other 
words, for every $100 that an immigrant sent home, to help their family 
and loved ones, $12 was siphoned off by these businesses in order to 
``service'' that transaction.
  That adds up to a $20-$30 average cost, occasionally it can be 
considerably more, for poor, hard-working folks for whom the typical 
remittance--around $250 to $300 a month--represents a significant 
percentage of their monthly income.
  Multiplied by millions, these excessive charges constitute a 
significant major economic force. These millions could have otherwise 
been used to feed children, house a family, or invest in a small 
business--all of which markedly improve overall quality of life.
  The ``Money WIRE Act'' would require money wire transmitting 
businesses to disclose to senders, and receivers, of international 
money wire transfers the exchange rate used in association with the 
transaction; any surcharges, commissions or fees charged to the 
customer for the service; and the exact amount of the foreign currency 
to be received by the recipient in the foreign country.
  It also requires that that rate and fee information be prominently 
displayed at the wire transmitting service location and on all receipts 
associated with the money wire transaction--and it ensures that those 
disclosures occur in the same language as that principally used by the 
business to advertise its money transmitting services, if that language 
is other than English.
  The bill also requires Federal banking regulators and the Department 
of Treasury to conduct a study, and submit a report to Congress, of the 
fees and fees disclosure at traditional financial institutions compared 
to those that occur at money transmitting businesses for money wire 
transactions.
  Finally, the Act includes a provision that expands the ``field of 
membership'' definition for credit unions to give non-members, 
particularly unbanked and immigrant communities, access to credit 
unions for international money transfer, money order, and check cashing 
services, where the costs for these services are significantly less.
  This legislation does more than merely provide better information to 
consumers--it actually helps them and their families financially. 
Consumers will see increased competition among wire transfer service 
providers because they are better-informed and more knowledgeable. That 
competition will result in lower fees for the wire transfer services 
that will free up a greater portion of these cash remittances to go to 
the friends and families that they were originally intended for.
  In short, this is sound public policy that empowers those who do 
their part to help America's economy move forward.
  I hope that my colleagues will support this legislation and I ask 
unanimous consent that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1344

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Money Wire Improvement and 
     Remittance Enhancement Act of 2003'' (or the ``Money WIRE Act 
     of 2003'').

     SEC. 2. DISCLOSURE OF EXCHANGE RATES IN CONNECTION WITH 
                   INTERNATIONAL MONEY TRANSFERS.

       (a) In General.--The Electronic Fund Transfer Act (15 
     U.S.C. 1693 et seq.) is amended--
       (1) by redesignating sections 918, 919, 920, and 921 as 
     sections 919, 920, 921, and 922, respectively; and
       (2) by inserting after section 917 the following new 
     section:

     ``SEC. 918. DISCLOSURE OF EXCHANGE RATES IN CONNECTION WITH 
                   INTERNATIONAL MONEY TRANSFERS.

       ``(a) Definitions.--
       ``(1) International money transfer.--The term 
     `international money transfer' means any money transmitting 
     service involving an international transaction which is 
     provided by a financial institution or a money transmitting 
     business.
       ``(2) Money transmitting service.--The term `money 
     transmitting service' has the meaning given to such term in 
     section 5330(d)(2) of title 31, United States Code.
       ``(3) Money transmitting business.--The term `money 
     transmitting business' means any business which--
       ``(A) provides check cashing, currency exchange, or money 
     transmitting or remittance services, or issues or redeems 
     money orders, travelers' checks, and other similar 
     instruments; and
       ``(B) is not a depository institution (as defined in 
     section 5313(g) of title 31, United States Code).
       ``(b) Exchange Rate and Fees Disclosures Required.--
       ``(1) In general.--Any financial institution or money 
     transmitting business which initiates an international money 
     transfer on behalf of a consumer (whether or not the consumer 
     maintains an account at such institution or business) shall 
     provide the following disclosures in the manner required 
     under this section:
       ``(A) The exchange rate used by the financial institution 
     or money transmitting business in connection with such 
     transaction.
       ``(B) The exchange rate prevailing at a major financial 
     center of the foreign country whose currency is involved in 
     the transaction, as of the close of business on the business 
     day immediately preceding the date of the transaction (or the 
     official exchange rate, if any, of the government or central 
     bank of such foreign country).
       ``(C) All commissions and fees charged by the financial 
     institution or money transmitting business in connection with 
     such transaction.
       ``(D) The exact amount of foreign currency to be received 
     by the recipient in the foreign country, which shall be 
     disclosed to the consumer before the transaction is 
     consummated and printed on the receipt referred to in 
     paragraph (3).
       ``(2) Prominent disclosure inside and outside the place of 
     business where an international money transfer is 
     initiated.--The information required to be disclosed under 
     subparagraphs (A), (B), and (C) of paragraph (1) shall be 
     prominently displayed on the premises of the financial 
     institution or money transmitting business both at the 
     interior location to which the public is admitted for 
     purposes of initiating an international money transfer and on 
     the exterior of any such premises.
       ``(3) Prominent disclosure in all receipts and forms used 
     in the place of business where an international money 
     transfer is initiated.--The information required to be 
     disclosed under paragraph (1) shall be prominently displayed 
     on all forms and receipts used by the financial institution 
     or money transmitting business when initiating an 
     international money transfer in such premises.
       ``(c) Advertisements in Print, Broadcast, and Electronic 
     Media and Outdoor Advertising.--The information required to 
     be disclosed under subparagraphs (A) and (C) of subsection 
     (b)(1) shall be included--
       ``(1) in any advertisement, announcements, or solicitation 
     which is mailed by the financial institution or money 
     transmitting business and pertains to international money 
     transfer; or
       ``(2) in any print, broadcast, or electronic medium or 
     outdoor advertising display not on the premises of the 
     financial institution or money transmitting business and 
     pertaining to international money transfer.
       ``(d) Disclosures in Languages Other Than English.--The 
     disclosures required under this section shall be in English 
     and in the same language as that principally used by the 
     financial institution or money transmitting business, or any 
     of its agents, to advertise, solicit, or negotiate, either 
     orally or in writing, at that office if other than 
     English.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect at the end of the 3-month period beginning 
     on the date of the enactment of this Act.

     SEC. 3. STUDY ON FEE DISCLOSURES FOR MONEY WIRE 
                   TRANSMISSIONS.

       (a) Study.--The Federal banking agencies (as defined in 
     section 3 of the Federal Deposit Insurance Act) and the 
     Secretary of the Treasury shall jointly conduct a study on 
     fees charged and fee disclosures for money wire 
     transmissions.
       (b) Comparison of Prices.--The study required by subsection 
     (a) shall compare the disclosures provided by federally 
     insured depository institutions for money wire transmissions 
     with disclosures provided by money transmitting businesses 
     (as defined in section 5330(d)(1) of title 31, United States 
     Code) for such transmissions.

[[Page S8734]]

       (c) Report Required.--The Federal banking agencies and the 
     Secretary of the Treasury shall jointly submit a report on 
     the study required under subsection (a) to the Congress 
     before the end of the 1-year period beginning on the date of 
     enactment of this Act.

     SEC. 4. FEDERAL CREDIT UNION ACT AMENDMENT.

       Paragraph (12) of section 107 of the Federal Credit Union 
     Act (12 U.S.C. 1757(12)) is amended to read as follows:
       ``(12) in accordance with regulations prescribed by the 
     Board--
       ``(A) to sell, to persons in the field of membership, 
     negotiable checks (including travelers checks), money orders, 
     and other similar money transfer instruments; and
       ``(B) to cash checks and money orders for persons in the 
     field of membership for a fee;''.

  Mr. AKAKA. Mr. President, I rise as a cosponsor of the Money Wire 
Improvement and Remittance Enhancement Act introduced by my colleague, 
Senator Corzine. I thank Senator Corzine for his leadership on this 
issue.
  Immigrants often send a portion of their hard-earned wages to their 
relatives abroad. Remittances are often used to improve the standard of 
living of recipients by increasing access to health care, education, 
and essentials of daily life. In addition, remittances contribute 
significantly to the economic development of nations. For example, 
Philippines workers across the globe sent an estimated $6.4 billion 
back to the Philippines in 2001.
  Despite the tremendous importance of remittances, people who send 
them are often unaware of the fees and exchange rates assessed in these 
transactions which reduce the amount of money received by their family 
members. Fees for sending remittances often can be ten to twenty 
percent of the value of the transaction. Also, the exchange rate used 
in the transaction can be significantly lower than the market rate.
  Consumers and their families cannot afford to remain uninformed about 
their financial service options and the fees placed on their 
transactions. This legislation would ensure that each customer is fully 
informed of all of the fees and the exchange rates used in sending 
money.
  I am hopeful that the enactment of this legislation will result in 
more people utilizing banks and credit unions for remittances because 
these institutions do not charge the exorbitant fees often associated 
with remittances processed by certain other entities. In addition, if 
unbanked immigrants take advantage of the remittance services offered 
by banks and credit unions, they will be more likely to open up an 
account. This would allow immigrants to take advantage of the 
opportunities for saving and borrowing found at mainstream financial 
institutions and offer them alternatives to fringe banking products, 
such as check cashing services.
  The Money Wire Improvement and Remittance Enhancement Act has special 
significance to my home State of Hawaii. Hawaii is home to significant 
numbers of recent immigrants from many nations, including the 
Philippines, who send remittances to their relatives abroad. We must do 
what we can to ensure that their hard-earned dollars are not eroded by 
unnecessary fees or a lack of transparency regarding exchange rates.
  I encourage my colleagues to support this much-needed legislation.
                                 ______