Latinos and the Remittances Market: Implications under Dodd-Frank Marisabel Torres, Policy Analyst Wealth-Building Policy Project

National Council of La Raza Largest national Hispanic civil rights and advocacy organization in the U.S. founded in 1968 to improve opportunities for Hispanics Headquarters in Washington, DC. Operations in AZ, CA, IL, NY, TX, and Puerto Rico Three major functions: – Strategic, capacity-building assistance to community-based organizations (CBOs) – Applied research, policy analysis, and advocacy – Public information efforts and other events Nearly 300 Affiliate partners in 41 states, Puerto Rico, and the District of Columbia

Historical and Projected Latino Share of the U.S. Population, *NCLR calculations using U.S. Census Bureau, ―American FactFinder,‖ 2000 and 2010 Decennial Census, (accessed March 2011).

Economic Conditions Paul Taylor, Richard Fry, and Rakesh Kochhar, Wealth Gaps Rise to Record Highs Between Whites, Blacks, Hispanics (Washington, DC: Pew Research Center, 2011).

Dodd-Frank Wall Street Reform and Consumer Protection Act

How the Consumer Financial Protection Bureau (CFPB) Can Help Latinos Product innovation Equal access to financial markets Consumer protection

CFPB and Remittances

Remittances sent $22.87 billion Fees & other costs $1.5 billion 2009 Estimates for Mexican immigrants sending remittances from the U.S.

Remittance process Unclear terms Little to no customer recourse Unjust fees

January 20, 2012 CFPB announcement that it will implement the Electronic Fund Transfer Act Financial institutions must provide full disclosure to consumers before accepting payment Disclosures must include the exchange rate, fees, and the amount of money to be delivered Proof of payment, along with the date the money will be received, must also be provided to the consumer Companies providing remittance transfers are responsible for any errors that occur Effective February 2013

New Disclosure Rules – pre payment Transfer amount Transfer fees Transfer taxes Total: transfer amount + taxes + fees Exchange rate

New Disclosure Rules – post payment All information required in pre-payment Date available Recipient – name, phone or address Statement of rights – on error resolution or cancellation Remittance Transfer Provider (RTP) identification – name, phone, web site State Regulator and CFPB Contact

Errors include: Incorrect amount paid by sender Computational error made by Remittance Transfer Provider Failure to make funds available by the date provided in the post- payment document ERROR RESOLUTION Sender has 180 days after disclosed date of availability to file a notice Remittance Transfer Provider has 90 days after receipt of notice of error to determine if an error was made

Coverage The rules apply to remittance transfers if they are: More than $15 Made by a consumer in the United States, and Sent to a person or company in a foreign country This includes many types of transfers, including wire transfers The rules apply to most companies that offer remittance transfers, including: Banks, Thrifts, Credit unions, and Money transmitters

For more information : Consumer Financial Protection Bureau remittance-rule-amendment-regulation-e/

Marisabel Torres, NCLR Office of Research, Advocacy and Legislation