International Remittance Consumer Protection Act of 2004 - Amends the Electronic Fund Transfer Act to require a remittance transfer provider to: (1) clearly and conspicuously make specified disclosures in writing and in a form that the consumer may keep to each consumer requesting a remittance transfer; and (2) make such disclosures in English and in the same languages principally used by the remittance transfer provider, or its agents at that office, if other than English.
Prescribes error resolution guidelines and remedies governing remittance transfer errors.
Instructs the Secretary of the Treasury to publish electronically on each business day the foreign currencies dollar exchange rate.
Amends the Federal Credit Union Act to empower Federal Credit Unions to: (1) provide remittance transfers to persons in the field of membership; and (2) cash checks and money orders for such persons for a fee.
Directs the Board of Governors of the Federal Reserve System to work with the Federal reserve banks to expand the use of the automated clearinghouse system for remittance transfers to foreign countries.
Requires certain Federal banking agencies to provide guidelines to financial institutions offering low-cost remittance transfers and no-cost or low-cost basic consumer accounts, as well as agency services to remittance transfer providers.
Requires such agencies and the Secretary to assist the Financial Literacy and Education Commission in improving the financial literacy and education of consumers who send remittances.
Amends the Foreign Assistance Act of 1961 to direct the President, acting through the Administrator of the U.S. Agency for International Development, to provide assistance to leverage personal remittances and reduce the cost of remittances sent to Latin America and the Caribbean.
Amends the Inter-American Development Bank Act to direct the Secretary of the Treasury to instruct the U.S. Executive Director at the Inter-American Development Bank to use the U.S. voice, vote, and influence to urge the Bank, among other specified things, to provide assistance to increasing access to financial institutions for the poor and working with local financial institutions to reduce fees and other costs associated with sending or receiving remittances.
Directs the Comptroller General to study and report to specified congressional committees on the remittance transfer system.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5315 Introduced in House (IH)]
108th CONGRESS
2d Session
H. R. 5315
To amend the Electronic Fund Transfer Act to extend certain consumer
protections to international remittance transfers of funds originating
in the United States, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 8, 2004
Mr. Gutierrez (for himself, Mr. Frank of Massachusetts, Mr. Menendez,
Mr. Hinojosa, Mr. Rodriguez, Ms. Waters, Ms. Lee, Mrs. Maloney, Mr.
Gonzalez, Mr. Acevedo-Vila, Mr. Grijalva, Mr. Serrano, Ms. Roybal-
Allard, Ms. Solis, Mrs. Napolitano, Mr. Towns, Mr. Bell, and Mr. Meeks
of New York) introduced the following bill; which was referred to the
Committee on Financial Services, and in addition to the Committee on
International Relations, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Electronic Fund Transfer Act to extend certain consumer
protections to international remittance transfers of funds originating
in the United States, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``International Remittance Consumer
Protection Act of 2004''.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) In 2003, worker remittances from the United States to
Latin America reached $31,000,000,000 and that volume is
expected to rise as the region is both the fastest growing
remittance market in the world and has the highest volume of
remittances in the world.
(2) Of the $31,000,000,000 in remittances to Latin America,
$14,000,000,000 went to Mexico: an amount exceeding the
country's total revenues from tourism, and representing more
than \2/3\ of the value of petroleum exports and roughly 180
percent of the amount of agricultural exports.
(3) Remittances account for at least 10 percent of the
gross domestic product of 6 countries in Latin America: Haiti,
Nicaragua, El Salvador, Jamaica, the Dominican Republic, and
Guyana.
(4) The Declaration of Nuevo Leon from the January 2004
Special Summit of the Americas recognized that ``. . .
remittances are an important source of capital in many
countries of the Hemisphere . . .''.
(5) The Declaration of Nuevo Leon also committed the
countries of the Americas to ``. . . take concrete actions to
promote the establishment, as soon as possible, of necessary
conditions, in order to achieve the goal of reducing by at
least half the regional average cost of these transfers no
later than 2008''.
(6) Studies have shown that that, on average, around 10
percent of remittances received are saved or invested by the
recipients which supports 2 conclusions: that some percentage
of recipients are therefore in a position to use remittance
money to create new businesses and that financial institutions
can also use remittances as the basis of credit for
entrepreneurs starting small or micro-enterprises.
(7) Since affordable, long-term mortgages are not widely
available in many countries of the Western Hemisphere,
financial institutions can increase the number of mortgages
they provide to poor people in the region by using remittances
as the basis for credit.
(8) The Multilateral Investment Fund of the Inter-American
Development Bank estimates that in February of 2004, the
average cost in the United States of sending a remittance to a
Latin American country was roughly 8 percent of the amount
remitted.
(9) The Multilateral Investment Fund also estimates that
roughly 61 percent of adult foreign-born Hispanic persons
living in the United States, about 10,000,000 people, send
remittances to their countries of origin in Latin America and
that the amount of the average remittance to Latin America
ranges between $200 and $300.
(10) The Multilateral Investment Fund estimates that the
States of California, New York, Texas, Florida, Illinois, and
New Jersey each remit more than $1,000,000,000 annually to
Latin America, and will account for $21,700,000,000, or roughly
70 percent of the $31,000,000,000 in remittances going to Latin
America in 2004.
(11) Recent surveys show that nearly 80 percent of
individuals sending remittances use international money
transfer companies, and fewer than 10 percent use banks and
credit unions.
(12) Roughly \1/2\ of Latin American immigrants in the
United States hold bank accounts, and only 10 percent of the
recipients in Latin America of remittances from the United
States hold bank accounts.
(13) Individuals and families without access to the banking
system, in the United States and elsewhere in the Americas, pay
higher fees, have difficulty conducting financial transactions,
and lack the ability to establish credit records or obtain
other benefits from financial institutions.
(14) The Federal banking agencies (as defined in section 3
of the Federal Deposit Insurance Act) recently agreed to notify
financial institutions that the remittances services they offer
to consumers can receive consideration in any evaluation under
the Community Reinvestment Act of 1977 as both a retail
service, and as a community development service if remittances
serve to increase access to financial services by low- and
moderate-income individuals.
(15) The Federal banking agencies also agreed that current
regulations under the Community Reinvestment Act of 1977
provide for a distinction between the mere provision of
remittances services by a financial institution and the
``responsiveness'' of such services to the financial services
needs of low- and moderate-income individuals--thereby allowing
for the consideration of lower cost remittances services in an
evaluation under such Act.
(16) The increased participation of regulated financial
institutions, such as banks, savings associations, and credit
unions, holds the potential for reducing the costs of
remittances while at the same time offering the opportunity to
``bank the unbanked'' in Latin American immigrant communities
in the United States.
SEC. 3. TREATMENT OF REMITTANCE TRANSFERS.
(a) In General.--The Electronic Fund Transfer Act (15 U.S.C. 1693
et seq.) is amended--
(1) in section 902(b), by inserting ``and remittance''
after ``electronic fund'';
(2) by redesignating sections 918, 919, 920, and 921 as
sections 919, 920, 921, and 922, respectively; and
(3) by inserting after section 917 the following:
``SEC. 918. REMITTANCE TRANSFERS.
``(a) Disclosures Required for Remittance Transfers.--
``(1) In general.--Each remittance transfer provider shall
make disclosures to consumers, as specified by this section and
augmented by regulation of the Board.
``(2) Specific disclosures.--In addition to any other
disclosures applicable under this title, a remittance transfer
provider shall clearly and conspicuously disclose, in writing
and in a form that the consumer may keep, to each consumer
requesting a remittance transfer--
``(A) at the time at which the consumer makes the
request, and prior to the consumer making any payment
in connection with the transfer--
``(i) the total amount of currency that
will be required to be tendered by the consumer
in connection with the remittance transfer;
``(ii) the amount of currency that will be
sent to the designated recipient of the
remittance transfer, using the values of the
currency into which the funds will be
exchanged;
``(iii) the total remittance transfer cost,
identified as the `Total Cost'; and
``(iv) an itemization of the charges
included in clause (iii), as determined
necessary by the Board; and
``(B) at the time at which the consumer makes
payment in connection with the remittance transfer, if
any--
``(i) a receipt showing--
``(I) the information described in
subparagraph (A);
``(II) the promised date of
delivery;
``(III) the name and telephone
number or address of the designated
recipient; and
``(ii) a notice containing--
``(I) information about the rights
of the consumer under this section to
resolve errors; and
``(II) appropriate contact
information for the remittance transfer
provider and its State licensing
authority and Federal or State
regulator, as applicable.
``(3) Exemption authority.--The Board may, by rule, and
subject to subsection (d)(3), permit a remittance transfer
provider--
``(A) to satisfy the requirements of paragraph
(2)(A) orally if the transaction is conducted entirely
by telephone;
``(B) to satisfy the requirements of paragraph
(2)(B) by mailing the documents required under such
paragraph to the consumer not later than 1 business day
after the date on which the transaction is conducted,
if the transaction is conducted entirely by telephone;
and
``(C) to satisfy the requirements of subparagraphs
(A) and (B) of paragraph (2) with 1 written disclosure,
but only to the extent that the information provided in
accordance with paragraph (2)(A) is accurate at the
time at which payment is made in connection with the
subject remittance transfer.
``(b) Foreign Language Disclosures.--The disclosures required under
this section shall be made in English and in the same languages
principally used by the remittance transfer provider, or any of its
agents, to advertise, solicit, or market, either orally or in writing,
at that office, if other than English.
``(c) Remittance Transfer Errors.--
``(1) Error resolution.--
``(A) In general.--If a remittance transfer
provider receives oral or written notice from the
consumer within 365 days of the promised date of
delivery that an error occurred with respect to a
remittance transfer, including that the full amount of
the funds to be remitted was not made available to the
designated recipient in the foreign country, the
remittance transfer provider shall resolve the error
pursuant to this subsection.
``(B) Remedies.--Not later than 90 days after the
date of receipt of a notice from the consumer pursuant
to subparagraph (A), the remittance transfer provider
shall, as applicable to the error and as designated by
the consumer--
``(i) refund to the consumer the total
amount of funds tendered by the consumer in
connection with the remittance transfer which
was not properly transmitted;
``(ii) make available to the designated
recipient, without additional cost to the
designated recipient or to the consumer, the
amount appropriate to resolve the error;
``(iii) provide such other remedy, as
determined appropriate by rule of the Board for
the protection of consumers; or
``(iv) demonstrate to the consumer that
there was no error.
``(2) Regulations.--The Board shall establish, by
regulation, clear and appropriate standards for remittance
transfer providers with respect to error resolution relating to
remittance transfers, to protect consumers from such errors.
``(d) Applicability of Other Provisions of Law.--
``(1) Applicability of title 18 and title 31 provisions.--A
remittance transfer provider may only provide remittance
transfers if such provider is in compliance with the
requirements of section 5330 of title 31, United States Code,
and section 1960 of title 18, United States Code, as
applicable.
``(2) Applicability of this title.--
``(A) Exclusions for certain remittances.--A
remittance transfer that is not an electronic fund
transfer, as defined in section 903, shall not be
subject to any of sections 905 through 913.
``(B) Full applicability for certain remittances.--
A remittance transfer that is an electronic fund
transfer, as defined in section 903, shall be subject
to all provisions of this title that are otherwise
applicable to electronic fund transfers under this
title.
``(3) Rule of construction.--Nothing in this section shall
be construed--
``(A) to affect the application to any transaction,
to any remittance provider, or to any other person of
any of the provisions of subchapter II of chapter 53 of
title 31, United States Code, section 21 of the Federal
Deposit Insurance Act, or chapter 2 of title I of
Public Law 91-508, or any regulations promulgated
thereunder; or
``(B) to cause any fund transfer that would not
otherwise be treated as such under paragraph (2) to be
treated as an electronic fund transfer, or as otherwise
subject to this title, for the purposes of any of the
provisions referred to in subparagraph (A) or any
regulation prescribed under such subparagraph.
``(e) Publication of Exchange Rates.--The Secretary of the Treasury
shall make available to the public in electronic form, not later than
noon on each business day, the dollar exchange rate for all foreign
currencies, using any methodology that the Secretary determines
appropriate, which may include the methodology used pursuant to section
613(b) of the Foreign Assistance Act of 1961.
``(f) Agents and Subsidiaries.--A remittance transfer provider
shall be liable for any violation of this section by any agent or
subsidiary of that remittance transfer provider.
``(g) Definitions.--For purposes of this section, the following
definitions shall apply:
``(1) Exchange rate fee.--The term `exchange rate fee'
means the difference between the total dollar amount
transferred, valued at the exchange rate offered by the
remittance transfer provider, and the total dollar amount
transferred, valued at the exchange rate posted by the
Secretary of the Treasury in accordance with subsection (e) on
the business day prior to the initiation of the subject
remittance transfer.
``(2) Remittance transfer.--The term `remittance transfer'
means the electronic (as defined in section 106(2) of the
Electronic Signatures in Global and National Commerce Act)
transfer of funds at the request of a consumer located in any
State to a person in another country that is initiated by a
remittance transfer provider, whether or not the consumer is an
account holder of the remittance transfer provider or whether
or not the remittance transfer is also an electronic fund
transfer, as defined in section 903.
``(3) Remittance transfer provider.--The term `remittance
transfer provider' means any person or financial institution
that provides remittance transfers on behalf of consumers in
the normal course of its business, whether or not the consumer
is an account holder of that person or financial institution.
``(4) State.--Notwithstanding the definition contained in
section 903, the term `State' means any of the several States,
the Commonwealth of Puerto Rico, the District of Columbia, and
any territory or possession of the United States.
``(5) Total remittance transfer cost.--The term `total
remittance transfer cost' means the total cost of a remittance
transfer expressed in dollars, including all fees charged by
the remittance transfer provider, including the exchange rate
fee.''.
(b) Effect on State Laws.--Section 919 of the Electronic Fund
Transfer Act (12 U.S.C. 1693q) is amended--
(1) in the 1st sentence, by inserting ``or remittance
transfers (as defined in section 918)'' after ``transfers'';
and
(2) in the 2nd sentence, by inserting ``, or remittance
transfer providers (as defined in section 918), in the case of
remittance transfers,'' after ``financial institutions''.
SEC. 4. FEDERAL CREDIT UNION ACT AMENDMENT.
Paragraph (12) of section 107 of the Federal Credit Union Act (12
U.S.C. 1757(12)) is amended to read as follows:
``(12) in accordance with regulations prescribed by the
Board--
``(A) to provide remittance transfers, as defined
in section 918(h) of the Electronic Fund Transfer Act,
to persons in the field of membership; and
``(B) to cash checks and money orders for persons
in the field of membership for a fee;''.
SEC. 5. AUTOMATED CLEARINGHOUSE SYSTEM.
(a) Expansion of System.--The Board of Governors of the Federal
Reserve System shall work with the Federal reserve banks to expand the
use of the automated clearinghouse system for remittance transfers to
foreign countries, with a focus on countries that receive significant
remittance transfers from the United States, based on--
(1) the number, volume, and sizes of such transfers;
(2) the significance of the volume of such transfers,
relative to the external financial flows of the receiving
country; and
(3) the feasibility of such an expansion.
(b) Report to Congress.--Before the end of the 180-day period
beginning on the date of the enactment of this Act, and on April 30
biannually thereafter, the Board of Governors of the Federal Reserve
System shall submit a report to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives on the status of the automated
clearinghouse system and its progress in complying with the
requirements of this section.
SEC. 6. EXPANSION OF FINANCIAL INSTITUTION PROVISION OF REMITTANCE
TRANSFERS.
(a) Provision of Guidelines to Institutions.--Each of the Federal
banking agencies (as defined in section 3 of the Federal Deposit
Insurance Act) and the National Credit Union Administration shall
provide guidelines to financial institutions under the jurisdiction of
the agency regarding--
(1) the offering of low-cost remittance transfers and no-
cost or low-cost basic consumer accounts;
(2) the availability of agency services to remittance
transfer providers; and
(3) specific options for financial institutions to use to
take advantage of automated clearing systems, including the
FedACH International Services offered by the Board of Governors
of the Federal Reserve System and the Federal reserve banks, to
transmit remittances at low cost.
(b) Content of Guidelines.--Guidelines provided to financial
institutions under this section shall include--
(1) information as to the methods of providing remittance
transfer services;
(2) the potential economic opportunities in providing low-
cost remittance transfers; and
(3) the potential value to financial institutions of
broadening their financial bases to include persons that use
remittance transfers.
(c) Assistance to Financial Literacy Commission.--The Secretary of
the Treasury and each agency referred to in subsection (a) shall, as
part of their duties as members of the Financial Literacy and Education
Commission, assist that Commission in improving the financial literacy
and education of consumers who send remittances.
(d) Multimedia Campaign.--The Secretary of the Treasury shall, as
part of the national public service multimedia campaign established
under section 518(a) of the Fair and Accurate Credit Transactions Act
of 2003, undertake a multilingual multimedia campaign to inform
populations that are remittance users of the low-cost options for
remittance transfers available to them, such as services provided by
depository institutions and credit unions.
SEC. 7. AID ASSISTANCE TO INCREASE CAPITAL AND LOWER REMITTANCE
TRANSFER COSTS.
(a) In General.--Part I of the Foreign Assistance Act of 1961 (22
U.S.C. 2151 et seq.) is amended by adding at the end the following:
``CHAPTER 13--SOCIAL INVESTMENT AND ECONOMIC DEVELOPMENT FOR THE
AMERICAS
``SEC. 499H. FACILITATING FLOWS OF PERSONAL REMITTANCES.
``(a) In General.--The President, acting through the Administrator
of the United States Agency for International Development, shall
provide assistance to leverage personal remittances and reduce the cost
of remittances sent to Latin America and the Caribbean by--
``(1) increasing access to financial institutions for the
poor and working with local financial institutions to reduce
fees and other costs associated with sending or receiving
remittances;
``(2) working with local financial institutions to develop
programs whereby personal remittances could be used as the
basis of credit for mortgages and loans for small business,
microenterprises, housing, and other enterprises; and
``(3) providing matching funds for United States' private
entities that send remittances for development projects in
Latin America and the Caribbean.
``(b) Implementation.--The United States Agency for International
Development shall follow the best practices of the Inter-American
Development Bank and other appropriate organizations when designing and
implementing programs that leverage personal remittances and reduce the
cost of remittances sent to Latin America and the Caribbean.''.
(b) GAO Study Regarding the Effectiveness and Success of Pilot
Projects Implemented by the United States Agency for International
Development.--
(1) Study.--The Comptroller General of the United States
shall conduct a study on the effectiveness and success of the
pilot projects that have been implemented by the United States
Agency for International Development's missions in Mexico, El
Salvador, and Jamaica, and through the United States Agency for
International Development's Global Development Alliance.
(2) Report.--Before the end of the 1-year period beginning
on the date of the enactment of this Act, the Comptroller
General shall submit a report to the Congress on the findings
and conclusions resulting from the study conducted under
paragraph (1), together with such recommendations for
legislative or administrative action as the Comptroller General
may determine to be appropriate.
SEC. 8. INTER-AMERICAN DEVELOPMENT BANK ASSISTANCE TO FACILITATE FLOWS
OF PERSONAL REMITTANCES.
The Inter-American Development Bank Act (22 U.S.C. 283--283z-10) is
amended by adding at the end the following new section:
``SEC. 39. FACILITATING FLOWS OF PERSONAL REMITTANCES.
``The Secretary of the Treasury shall instruct the United States
Executive Director at the Bank to use the voice, vote, and influence of
the United States to urge the Bank to provide assistance to--
``(1) increasing access to financial institutions for the
poor and working with local financial institutions to reduce
fees and other costs associated with sending or receiving
remittances;
``(2) working with local financial institutions to develop
programs whereby personal remittances could be used as the
basis of credit for mortgages and loans for small business,
microenterprises, housing, and other enterprises; and
``(3) providing matching funds for United States' private
entities that send remittances for development projects in
Latin America and the Caribbean.''.
SEC. 9. STUDY AND REPORT ON REMITTANCES.
(a) Study.--The Comptroller General of the United States shall
conduct a study and analysis of the remittance transfer system,
including an analysis of its impact on consumers.
(b) Areas of Consideration.--The study conducted under this section
shall include, to the extent that information is available--
(1) an estimate of the total amount, in dollars,
transmitted from individuals in the United States to other
countries, including per country data, historical data, and any
available projections concerning future remittance levels;
(2) a comparison of the amount of remittance funds, in
total and per country, to the amount of foreign trade,
bilateral assistance, and multi-development bank programs
involving each of the subject countries;
(3) an analysis of the methods used to remit the funds,
with estimates of the amounts remitted through each method and
descriptive statistics for each method, such as market share,
median transaction size, and cost per transaction, including
through--
(A) depository institutions;
(B) postal money orders and other money orders;
(C) automatic teller machines;
(D) wire transfer services; and
(E) personal delivery services;
(4) an analysis of advantages and disadvantages of each
remitting method listed in subparagraphs (A) through (E) of
paragraph (3);
(5) an analysis of the types and specificity of disclosures
made by various types of remittance transaction providers to
consumers who send remittances; and
(6) if reliable data are unavailable, recommendations
concerning options for the Congress to consider to improve the
state of information on remittances from the United States.
(c) Report to Congress.--Before the end of the 1-year period
beginning on the date of the enactment of this Act, the Comptroller
General shall submit a report to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives on the results of the study conducted
under this section.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Financial Services, and in addition to the Committee on International Relations, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committee on International Relations, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committee on International Relations, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Financial Institutions and Consumer Credit.
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