|FOR IMMEDIATE RELEASE:||
CONTACT: Jesse Jacobs
|Friday, February 22, 2002||
Senator Paul S. Sarbanes, the Chairman of the Senate Banking, Housing and Urban Affairs Committee, today announced that the full Committee will meet to examine issues regarding the sending of remittances.
Immigrants to this country have traditionally sent remittances to family members who are still in the country of origin. Emerging evidence shows that in the last decade the dollar amount of remittances sent from America abroad has increased dramatically. Today it is estimated that more than $20 billion flows abroad from the United States in the form of remittances, with the money going predominantly to Latin American countries. Transaction costs for sending this money are estimated at up to $3 billion.
The remittance market is characterized by multiple transactions of small dollar amounts sent between individuals and communities that have relatively few resources. Wire services have been the major transfer agents, although banks and credit unions have recently entered selected areas of the market. At the Banking Committee's recent hearings on Financial Literacy and Education, witnesses expressed concerns that the remittance market often charges excessive fees, manipulates exchange rates and fails to disclose full transaction costs, with the result that users are over charged and the amount of money received at home is significantly reduced. Remittances are also an important source of development capital. In five countries remittances exceed ten percent of GDP and in Mexico remittance dollars are greater than the entire tourism economy. This hearing will address the issues raised in two reports, commissioned by the Multilateral Investment Fund of the Inter American Development Bank, which will be released at the hearing.
"Remittors need to be fully informed about the options available to them for sending money home, and they need to be financially literate in order to understand the terms, which are often in small print," said Sarbanes. "We have asked our witnesses to outline the scope of the problem, and we will seek their suggestions for ensuring a remittance market that is both more efficient and more equitable."
The hearing will be held:
Scheduled to present their recommendations to the Committee are: