[Congressional Record Volume 153, Number 98 (Monday, June 18, 2007)]
[House]
[Pages H6581-H6582]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        REGRETTABLE REMITTANCES

  Mr. STEARNS. Madam Speaker, the immigration problem has been a topic 
of contentious debate for years now, with few results. The influx, both 
legal and illegal, of immigrants from Mexico to North America numbers 
at a minimum about 500,000 people a year. It is clear that the majority 
of these immigrants are coming to our country for the better wages to 
provide for their families. And this is the heart of the problem. The 
Mexican economy is continually stunted in its growth by fiscal 
mismanagement, corruption, and a perpetual dependence upon foreign aid 
and remittances. Mexico must make tough decisions and get its economy 
in shape. Until then, Madam Speaker, we will continue to face massive 
immigration from the south.
  While we are painfully aware of the problems illegal immigration is 
causing our society, consider what it is doing to Mexico in the long 
run. The massive immigration is draining many villages across Mexico of 
their important labor pool. Families are separated while the husbands 
and fathers choose to cross our borders to get better lives for 
themselves and for their families. Mexico is slow in reforming their 
economic policies, in part perhaps because of the influx of money from 
the remittances from the United States that enables them to continue 
their unhealthy policies.
  Let me explain. The money sent in the form of remittances amounted to 
about $23 billion in 2006, according to the Bank of Mexico, the 
country's central bank. That amount is up almost sevenfold in a dozen 
years. As that number has grown, the fee for remitting money has 
dropped from an average of about 9.2 percent in 1999 to just about 3 
percent this year, according to Bancomer, a Mexican bank.
  Sending money back to Mexico has become cheaper partly because the 
amounts have become bigger. It was about $290 on average 8 years ago, 
and now is up to over $350. More importantly, according to the Bank of 
Mexico, over 90 percent of remittances are now sent by electronic wire 
transfer compared with only 50 percent in 1995. In rural poor 
communities in Mexico, even the 3 percent transaction fee is a huge 
chunk cut out of a remittance check. That is why the Bank of Mexico and 
America's Federal Reserve are running a program called Directo a 
Mexico, or FedACH International Mexico Service, to cut the cost further 
for these folks.
  In this program, people receive an overnight transfer from an 
American bank account to a Mexican one. The two central banks act as 
middlemen, taking a cut of about 67 cents no matter what the size of 
the transaction. According to Elizabeth McQuerry of the Federal 
Reserve, banks then typically charge $2.50 to $5 to transfer about 
$350. In total, this new program cuts the costs of remittances by at 
least half. In America, 200 banks are now signed up for this service 
compared with just six that signed up when it was initiated in 2004. So 
far, the program is just beginning, handling about 27,000 transactions 
a month. However, another point of serious concern is that about 26,000 
of which are Social Security payments made by the American government 
to beneficiaries in Mexico.
  One kink in the program was that most of Mexico's poor, who are often 
the intended recipients of the funds, do not have bank accounts to pay 
them into. So to ensure that these funds can still get to Mexico, they 
developed another program, run by Bansefi, a Mexican government bank, 
that allows people in America to open bank accounts for their relatives 
in Mexico. Their relatives can then use these accounts to withdraw the 
money deposited through the remittance program.
  Madam Speaker, another question is, do the legal and illegal 
immigrants themselves have accounts to send money from? Statistics 
indicate as many as 70 percent do, according to a recent report by the 
Bank of Mexico. This is largely because hundreds of American banks, 
eager for deposits, will happily open accounts for people carrying only 
a Mexican consular identity card, rather than requiring official United 
States Government identification. This allows people without officially 
sanctioned rights to be in this country to send money out of it. As a 
result, the Mexican bank has seen rapid growth, with 3.4 million 
accounts

[[Page H6582]]

now open, compared to just 850,000 in the year 2001.
  If this trend continues, Madam Speaker, it will enable the Mexican 
government to continue to operate as it is today. Their economy will 
continue to stagnate, immigration will continue to bleed across our 
border, and the Mexican people will be caught in a downward spiral for 
generations to come.
  Obviously another part of any immigration reform is making sure that 
U.S. banks only open accounts for persons who have legally sanctioned 
rights to be in this country and not illegal aliens.

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