[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[Extensions of Remarks]
[Pages 5392-5393]
[From the U.S. Government Publishing Office, www.gpo.gov]



                       SHED LIGHT ON HIDDEN FEES

                                 ______
                                 

                         HON. LUIS V. GUTIERREZ

                              of illinois

                    in the house of representatives

                         Tuesday, April 3, 2001

  Mr. GUTIERREZ. Mr. Speaker, on March 29 I introduced the ``Wire 
Transfer Fairness and Disclosure Act of 2001,'' a bill to require 
additional disclosures relating to exchange rates in transfers 
involving international transactions. Sixty-two representatives 
currently support this important legislation.
  Immigrants throughout the United States work hard, save money and 
send billions of dollars to relatives living in foreign countries. The 
money sent home helps finance basic needs ranging from food and 
medicine to education to new homes. Unfortunately, customers wiring 
money to Mexico are often losing millions of dollars to undisclosed 
``currency conversion fees'' charged by giant firms such as Western 
Union and MoneyGram.
  Wire Transfer companies aggressively target audiences in immigrant 
communities with ads promising low rates for international transfers. 
However, such promises are grossly misleading particularly for those 
with ties to Mexico or other Latin American countries, since companies 
do not always clearly disclose extra fees charged for converting 
dollars into Mexican pesos. While large wire service companies 
typically obtain pesos at bulk bargain rates, they charge a significant 
currency conversion fee to their U.S. customers. The exchange rate 
charged to customers sending U.S. dollars to Mexico routinely varies 
from the benchmark rates by as much as 15 percent. The profits from 
these hidden currency conversion fees are staggering, allowing 
companies to reap millions of dollars more than they make from service 
fees.
  To address these problems, this Act requires full disclosure of all 
fees involved in all money-wiring transactions. More specifically, the 
bill requires that 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:
  The exchange rate used by the financial institution or money 
transmitting business in connection with such transaction.
  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).
  All commissions and fees charged by the financial institution or 
money transmitting business in connection with such transaction.
  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 given to the 
consumer.
  Mr. Speaker, I submit the full text of this pro-consumer legislation 
for the record and I urge my colleagues to support this important 
legislation.

                               H.R. 1306

       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 ``Wire Transfer Fairness and 
     Disclosure Act of 2001''.

     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

[[Page 5393]]

       ``(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 amendment 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.

     

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