[Congressional Record Volume 151, Number 52 (Tuesday, April 26, 2005)]
[House]
[Pages H2500-H2503]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           EXPANDED ACCESS TO FINANCIAL SERVICES ACT OF 2005

  Mr. CASTLE. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 749) to amend the Federal Credit Union Act to provide 
expanded access for persons in the field of membership of a Federal 
credit union to money order, check cashing, and money transfer 
services, as amended.
  The Clerk read as follows:

                                H.R. 749

       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 ``Expanded Access to Financial 
     Services Act of 2005''.

     SEC. 2. CHECK CASHING AND MONEY TRANSFER SERVICES OFFERED 
                   WITHIN THE FIELD OF MEMBERSHIP.

       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 (including 
     international and domestic electronic fund transfers); and
       ``(B) to cash checks and money orders and receive 
     international and domestic electronic fund transfers for 
     persons in the field of membership for a fee;''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Delaware (Mr. Castle) and the gentleman from California (Mr. Sherman) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Delaware (Mr. Castle).


                             General Leave

  Mr. CASTLE. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on H.R. 749, as amended.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Delaware?
  There was no objection.
  Mr. CASTLE. Mr. Speaker, I yield myself 5 minutes.
  Mr. Speaker, I rise in support of H.R. 749, the Expanded Access to 
Financial Services Act of 2005, introduced by the gentleman from 
Pennsylvania (Mr. Gerlach) and the gentleman from California (Mr. 
Sherman) and favorably reported to the House by the Committee on 
Financial Services.
  This bill makes a simple change to the Federal Credit Union Act to 
allow Federal credit unions to offer check cashing and money transfer 
services to anyone within their field of membership. H.R. 749 will 
serve the dual purpose of lowering the cost to consumers of both check 
cashing and wire transfer products, while providing credit unions the 
opportunity to establish relationships with individuals who are 
currently unbanked.
  Money transfers by individuals living and working in the U.S. to 
Latin America are currently estimated at $10 billion annually, and 
should more than double by 2010.

                              {time}  1600

  As the remittance market continues to grow, there becomes a 
significant danger in depriving customers of low-cost remittance 
products, thereby driving them to underground service providers that 
evade regulatory oversight. H.R. 749 will allow credit unions to offer 
remittance products to individuals who qualify for membership while 
promoting greater transparency within the remittance market. This 
improved transparency will enhance the ability for regulators and law 
enforcement agencies to track wire transfers used for illegal activity. 
Increasing the ease with which regulators and law enforcement agencies 
can follow the money trail is consistent with the recommendations of 
the 9/11 Commission on Terrorist Financing.
  Allowing Federal credit unions to offer products and services to all 
consumers within their field of membership would provide further 
benefits to our economy by allowing credit unions to establish 
relationships with individuals who are currently ``unbanked.'' Many 
users of remittance services are recent immigrants and should be 
empowered with the knowledge and resources necessary to open personal 
accounts at mainstream financial institutions. Studies indicate that as 
many as 10 million American households do not have a bank account. 
Establishing and successfully managing a personal

[[Page H2501]]

account with an insured depository institution can lead to greater 
economic self-sufficiency and long-term financial security. 
Particularly for low- and moderate-income Americans, opening a checking 
or savings account can be an important first step in establishing a 
credit history, which can unlock doors to other financial 
opportunities.
  I believe that this bill is a positive step toward ensuring that 
millions of unbanked Americans have access to secure, low-cost 
remittance products, while drawing these same customers into the 
regulated financial mainstream. I therefore encourage all of my 
colleagues to vote in favor of H.R. 749.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I think the gentleman from Delaware (Mr. Castle) 
summarized well the reasons for voting for this bill. If I had more 
forbearance, I would simply sit down, but I have a really nicely 
written speech here and will use a few minutes, hopefully abbreviating 
it, since so many of its points have already been covered.
  Mr. Speaker, I will put into the Record at this point a letter in 
support of this bill from the National Association of Federal Credit 
Unions.

                                              National Association


                                     of Federal Credit Unions,

                                    Arlington, VA, April 26, 2005.
     Hon. Mike Oxley,
     Chairman, House Committee on Financial Services, House of 
         Representatives, Washington, DC.
     Hon. Barney Frank,
     Ranking Member, House Committee on Financial Services, House 
         of Representatives, Washington, DC.
       Dear Chairman Oxley and Ranking Member Frank: On behalf of 
     the National Association of Federal Credit Unions (NAFCU), 
     the only national trade association that exclusively 
     represents the interests of our nation's federal credit 
     unions, I want to reiterate our support for the Expanded 
     Access to Financial Services Act of 2005 (H.R. 749) and urge 
     the House to bring up and pass this key legislation.
       NAFCU fully supports the merits of this bill, since abuses 
     are rampant in communities where immigrants rely on money 
     transfer companies to send remittances to family members and 
     others in their country of origin. Unfortunately, money 
     transfer companies oftentimes charge exorbitant fees on those 
     sending remittances, while imposing poor exchange rates. For 
     example, a $1000 money transfer to Mexico via IRnet would 
     cost $10, while the same transaction via Western Union would 
     cost between $30 and $50 depending on the Western Union 
     location. Also, the credit union providing the transfer may 
     be successful in converting an un-banked potential member 
     into a member. In reality, and in far too many cases, the 
     costs associated with sending such remittances is essentially 
     nothing more than another form of predatory lending. Many 
     people do not know that credit unions can provide a lower 
     cost and better alternative to these predatory practices. As 
     such, NAFCU is pleased that a number of our member credit 
     unions currently offer remittance services to their members.
       Last year, in testimony before the House Financial Services 
     Subcommittee on Financial Services and Consumer Credit during 
     a hearing on the issue of regulatory relief for credit unions 
     on July 20, 2004, NAFCU Board Secretary and Xerox FCU 
     President & CEO Bill Cheney testified:
       ``. . . NAFCU supports efforts to allow federal credit 
     unions to offer check-cashing and money-transfer services to 
     anyone within the credit union's field of membership. We 
     believe this new authority, which would be discretionary and 
     not mandatory, will allow credit unions to help combat abuses 
     by non-traditional financial institutions that prey on our 
     nation's immigrants and others who live and work in 
     underserved communities.''
       That statement remains true today. The credit union 
     industry continues to work on the front line to combat 
     financial illiteracy and to teach consumers about sound 
     financial practices. NAFCU believes that H.R. 749 is a good 
     step forward in creating an alternative to those who have no 
     choices in traditional financial services.
       Thank you for allowing us this opportunity to share our 
     support for H.R. 749. We hope that the House is able to bring 
     up and take action on this legislation in a timely manner. If 
     you or your staff have any questions regarding remittances 
     abuses and how credit unions can be used to help address 
     these problems, please do not hesitate to call on me or 
     NAFCU's Director of Legislative Affairs, Brad Thaler.
           Sincerely,
                                              Fred R. Becker, Jr.,
                                                President and CEO.

  Mr. Speaker, H.R. 749 would allow credit unions to provide lifeline 
services; that is to say international remittances, wire transfers, and 
check-cashing services to nonmembers who are within the credit union's 
field of membership. Now, a credit union is restricted and serves a 
restricted number of people. Some credit unions are based on 
employment, and so you may have a credit union that serves the textile 
workers of Los Angeles. You might have another credit union 
geographically based that serves the northeast San Fernando Valley. 
This bill only allows a credit union to serve those who are within its 
field of membership, who are eligible to become members of a credit 
union. And it makes good sense to allow those who fit within the field 
of membership, but are not yet members of the credit union, to get 
these lifeline services. These lifeline services are often priced very 
high, whether it be check-cashing on the one hand, or international 
remittances on the other. And to instead provide additional competition 
so that credit unions can bring the price of these services down would 
be very helpful to those at the very bottom of our economic ladder.
  As the gentleman from Delaware points out, it also brings people who 
do not have a relationship with a financial institution into a 
financial institution. It gives them a chance to move from nonmembers 
who are making use of the check cashing and remittance services, to 
members who have a checking account, and then gradually a savings 
account, a credit history, and a real piece of the American financial 
pie, if you will; a chance to participate with all of the services that 
the financial institutions of this country provide.
  Now, consumers who are sending remittances now, sometimes they are 
paying as much as 15 percent of the amount that they plan to send. So 
if you are sending $300 back to your parents in Mexico, you may spend 
$45, and this bill will provide additional competition in the 
international remittance area, where many credit unions providing 
services to those who are already members often provide these services 
for only $14 or less per transaction. By bringing people into credit 
unions, credit unions can do what they do best, and that is serve those 
who are within their field of membership and begin the process of 
providing financial education, combating predatory lending, and 
bringing people into the financial system.
  Today, more than 200 credit unions already provide to their members 
wire transfer services to almost 650 points of service in 40 countries. 
So the credit unions are well positioned to provide these wire transfer 
and international remittance services.
  In 2003, the Credit Union National Association adopted a group of 
principles designed to guide their members when providing these 
international remittance services. They basically say that credit 
unions should disclose the cost of the transaction in their advertising 
and brochures and in dealings with the customer, that the credit unions 
will provide current exchange rate information before conducting the 
transaction; that they will tell the customer the exact amount of 
foreign currency to be received by the recipient; and they will tell 
the sender when the funds will be available to the recipient. These 
kinds of high principles are important for those in the international 
remittance business, and to have credit unions more involved in that 
business and subject to those principles is an important step forward.
  As the gentleman from Delaware pointed out, the size of the 
international remittance business is quite large. In fact, it is 
estimated at least at $10 billion annually. It is expected to double by 
the end of this decade, and there are some estimates that place it well 
above $10 billion annually now.
  I should also mention that nearly half of the Latinos in this country 
do not have an account with a mainstream financial institution, and 
that is why it is so important in dealing with that immigrant 
community, as well as other immigrant communities from elsewhere in the 
world, that we provide this opportunity for credit unions to provide 
international remittance services.
  I should also take a moment to recognize the work of the gentleman 
from Illinois (Mr. Gutierrez) who has been the leader in dealing with 
all of the various aspects of the remittance, international remittance 
issues, and to recognize my friend, the gentleman from the Inland 
Empire (Mr. Baca) who provided a clarifying and perfecting amendment to 
this legislation. I believe that this legislation will help credit 
unions provide services to those

[[Page H2502]]

who need them, will drive down the price of those services, and will 
introduce people to our financial institutions. I urge an aye vote.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CASTLE. Mr. Speaker, I yield such time as he may consume to the 
gentleman from the Commonwealth of Pennsylvania (Mr. Gerlach).
  Mr. GERLACH. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I thank the gentleman from Ohio (Mr. Oxley) for taking up 
this bill so quickly, and the gentleman from California (Mr. Sherman) 
for his work on behalf of this important legislation. I would also like 
to thank the gentleman from California (Mr. Baca), the gentleman from 
Illinois (Mr. Gutierrez), the gentleman from Pennsylvania (Mr. 
Kanjorski), the gentleman from Ohio (Mr. LaTourette), and the gentleman 
from Texas (Mr. Paul) for their efforts as well.
  Mr. Speaker, I rise today to encourage my colleagues to support H.R. 
749, the Expanded Access to Financial Services Act. This bipartisan 
legislation will amend the Federal Credit Union Act to allow credit 
unions to offer money order, check cashing, and wire transfer services 
to anyone who is eligible to be a credit union member, whether or not 
they have credit union membership. The bill is identical to section 307 
of H.R. 1375, the Financial Services Regulatory Relief Act, which 
passed the House by a vote of 392 to 25 on March 18, 2004.
  H.R. 748 reaches out to individuals who, for whatever reason, do not 
have established bank accounts. These unbanked Americans, estimated to 
be up to 10 million households, are frequently charged high fees for a 
variety of financial services. By bringing competition to the 
marketplace, we can provide our constituents access to lower-fee 
alternatives.
  Many of those who would utilize these services are hardworking 
immigrants trying to wire money home to help provide for their 
families. According to the Pew Hispanic Center and Multilateral 
Investment Fund, $10 million is sent back to Latin America each year, a 
figure that can more than double in the next 5 years.
  It is my hope that the underserved persons who are reached by this 
bill will be able to use these services to establish a credit history 
that can then allow them to take advantage of other financial services. 
An initial positive experience with a depository institution may 
encourage the ``unbanked'' to explore other financial products.
  Further, bringing immigrant workers into financial institutions is 
important for national security. Credit unions are required to follow 
the recordkeeping and reporting requirements of the Bank Secrecy Act. 
They must also determine that customers are in the field of membership, 
a process that would involve personal documentation review. Having 
international money transfers go through regulated financial 
institutions makes it easier for law enforcement officials to learn of 
and follow suspicious activity.
  This legislation has the support of the National Credit Union 
Administration, the Credit Union National Association, and National 
Association of Federal Credit Unions.
  H.R. 749 is a good, bipartisan bill. It reaches out to communities 
that have historically been left out of the financial services arena 
and encourages hardworking Americans to develop relationships with 
financial institutions. I hope the Members will choose today to give 
their constituents access to affordable financial services.
  Mr. BACA. Mr. Speaker, I rise in strong support of H.R. 749, the 
Expanded Financial Services Act of 2005.
  This legislation will allow credit unions to offer services to 
individuals who are in their field of membership, not just those who 
are members.
  This bill will open up the marketplace, and will provide lower-cost 
services to underserved individuals. The result will be that thousands 
of unbanked households will be able to enter the economic mainstream.
  H.R. 749 includes a provision that I introduced in the Financial 
Services Committee that will allow these individuals to use credit 
unions to send international and domestic electronic fund transfers.
  This provision will help underserved individuals to send and receive 
funds to and from their families.
  Currently there are about 10 million households in the United States 
that do not have access to banking. This bill will help those 
individuals by giving them lower-cost financial alternatives to send 
funds to their families.
  H.R. 749 will promote competition in the money transfer industry, 
resulting in lower fees to consumers.
  By allowing credit unions to compete, we will bring huge savings to 
individuals transferring money and provide more money for those who 
need it most. The money people save by using credit unions can be 
reinvested in our economy, which helps all Americans.
  I urge my colleagues to vote yes on H.R. 749, so that thousands of 
underserved Americans can join the financial mainstream and access the 
American dream.
  Mr. CASE. Mr. Speaker, I rise today in strong support of H.R. 749, 
the Expanded Access to Financial Services Act of 2005. I do so as the 
proud representative of Hawai`i's Second District, in which our 
nation's credit unions have a long and rich history, and as one of my 
Hawai`i's 742,000 credit union members.
  H.R. 749 will allow credit unions to provide expanded services to 
both members and non-members otherwise eligible for membership. These 
expanded services include the issuance of travelers' checks and money 
orders, and electronic funds transfers.
  Most specifically, this bill, if signed into law, will in part enable 
many more of our citizens to transfer money overseas to family members 
and others with greater ease, thereby assisting our personal and 
financial interests. For it is a fact that our country is facing its 
highest level of immigration since the Depression era, with over 28.4 
million foreign-born individuals residing in the United States.
  My Hawai`i is no exception. According to the most recent Census 
Bureau's American Community Survey, Hawai`i, with 17.9 percent, has the 
fourth-largest percentage of foreign-born residents in the United 
States.
  An overwhelming majority of Hawai`i's foreign-born population is from 
Asia. According to the Susannah Wesley Community Center, a private, 
nonprofit agency contracted by the State of Hawai`i to provide 
immigrant services, Hawai`i's largest immigrant population--fifty 
percent of all incoming immigrants--hails from the Philippines. It is 
crucial to these populations and others that our financial institutions 
provide quick, efficient, and economical means by which monies may be 
transferred to their countries of origin and elsewhere.
  Unfortunately, our nation's financial infrastructure has been slow to 
offer such services, especially in the less urbanized and rural parts 
of our country such as my district where our credit unions have long 
filled an important community-based financial services function. As a 
result, there is a growing population of ``unbanked'' individuals, 
particularly immigrants, and a costly and inefficient money transfer 
process.
  The World Council of Credit Unions, along with the Credit Union 
National Association, offer credit unions a remittance product called 
the International Remittance Network (IRnet). IRnet is an electronic 
funds transfer service providing credit union members a safe and 
inexpensive way to send money overseas and domestically, and provides 
service to over 40 countries in Latin America, Asia, Africa and Europe, 
including the Philippines, Mexico, and Australia.
  IRnet significantly decreases the costs for individuals to transfer 
funds overseas. Over the past four years, the advent of IRnet and 
enhanced competition among our financial institutions offering money 
transfer services has driven down remittance costs for consumers. The 
average cost today of sending $300 to Mexico is between $13 and $14, or 
4-5 percent of the amount sent, compared to the average cost four years 
ago, which was between $30 and $32, or 10-11 percent.
  This legislation will expand the range and number of people eligible 
for the use of IRnet and thereby lower the costs paid by the consumer 
for these services through increased competition within the 
marketplace. In the process, it will also encourage a larger number of 
our newly-arrived citizens and residents to utilize our credit unions 
and other financial services.
  H.R. 749 will not harm or otherwise risk our country's financial or 
monetary security, as IRnet utilizes real-time monitoring of 
transactions against the Specially Designated Names, SDN, list from the 
Office of Foreign Asset Control. What this bill will do again is to 
help more people in our communities with more and better ways to 
provide for their personal and economic needs and obligations overseas 
while preserving basic homeland security protections.
  Mr. Speaker, I commend my colleague from Pennsylvania, Mr. Gerlach, 
for introducing this bill. I look forward to working with him and our 
nation's invaluable credit unions to see this measure through into law.
  Mr. SHERMAN. Mr. Speaker, I yield back the balance of my time.
  Mr. CASTLE. Mr. Speaker, I yield back the balance of my time.

[[Page H2503]]

  The SPEAKER pro tempore (Mr. Boozman). The question is on the motion 
offered by the gentleman from Delaware (Mr. Castle) that the House 
suspend the rules and pass the bill, H.R. 749, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________