[Congressional Record (Bound Edition), Volume 149 (2003), Part 12]
[Extensions of Remarks]
[Pages 16894-16895]
[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

                        Thursday, June 26, 2003

  Mr. GUTIERREZ. Mr. Speaker, today I am introducing the ``Wire 
Transfer Fairness and Disclosure Act of 2003,'' a bill to require 
additional disclosures relating to exchange rates in transfers 
involving international transactions.
  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

[[Page 16895]]

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 charges 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 urge my colleagues to support this pro-consumer 
legislation.

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