latinos and the remittances market: implications under dodd-frank marisabel torres, policy analyst...
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Latinos and the Remittances Market:
Implications under Dodd-Frank
Marisabel Torres, Policy Analyst Wealth-Building Policy Project
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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
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Historical and Projected Latino Share of the U.S. Population,
1970-2050
1970 1980 1990 2000 2010* 2020* 2030* 2040* 2050*0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
4.7%6.4%
9.0%
12.5%
16.4%
19.4%
23.0%
26.6%
30.2%
Percent Hispanic of the To-tal Population
*NCLR calculations using U.S. Census Bureau, ―American FactFinder,‖ 2000 and 2010 Decennial Census, http://factfinder2.census.gov (accessed March 2011).
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Economic Conditions
Hispanic households White households
$18,359
$134,992
$6,325
$113,149
Hispanic and White Households, Median Wealth 2005 and 2009
2005 2009
Paul Taylor, Richard Fry, and Rakesh Kochhar, Wealth Gaps Rise to Record Highs Between Whites, Blacks, Hispanics (Washington, DC: Pew Research Center, 2011).
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Dodd-Frank Wall Street Reform and Consumer Protection Act
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How the Consumer Financial Protection Bureau (CFPB) Can Help
Latinos
Product innovation
Equal access to financial markets
Consumer protection
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CFPB and Remittances
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Remittances sent•$22.87 billion
Fees & other costs
•$1.5 billion
2009 Estimates for Mexican immigrants sending remittances from the U.S.
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Remittance process
Unclear terms
Little to no customer recourse
Unjust fees
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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
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New Disclosure Rules – pre payment
• Transfer amount• Transfer fees• Transfer taxes• Total: transfer amount + taxes + fees• Exchange rate
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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
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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
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CoverageThe 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
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For more information:
Consumer Financial Protection Bureau http://www.consumerfinance.gov/
http://www.consumerfinance.gov/regulations/final-remittance-rule-amendment-regulation-e/