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,

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).

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).

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

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

For more information:

Consumer Financial Protection Bureau http://www.consumerfinance.gov/

http://www.consumerfinance.gov/regulations/final-remittance-rule-amendment-regulation-e/

Marisabel Torres, NCLROffice of Research,

Advocacy and Legislationmtorres@nclr.org