50+ Consumer, Civil Rights & Privacy Groups Urge CFPB to Eliminate Junk Fees in Remittances

October 29, 2024 — Press Release

Hidden and Predatory Remittance Fees Plague Immigrant Families

WASHINGTON – A coalition of over 50 consumer, civil rights, academics and privacy organizations submitted a letter this week urging the Consumer Financial Protection Bureau (CFPB) to take meaningful actions to reduce and eliminate junk fees in international remittance transactions – fund transfers frequently used by immigrants to send money to their families abroad. 

“The CFPB must take decisive action to address the rising costs of international remittances, which contribute to the financial stresses on low-income senders,” said Margot Saunders, senior attorney at the National Consumer Law Center “Undisclosed fees charged by recipients’ providers and exchange rate markups continue to add unnecessary costs to remittances. The CFPB needs to close these regulatory loopholes.”

Remittance costs have risen by 8% since 2022, totaling more than $13 billion per year, according to a recent study by the Financial Health Network. Rising costs increase the financial stress of working-class consumers; according to a recent UnidosUS’s report, 55% of Latinos surveyed reported that inflation and lack of income were their top economic concerns.

“Latinos, immigrants, and working-class consumers are experiencing rising costs in remittance fees and markups amounting to billions of dollars per year,” said Santiago Sueiro, senior policy analyst at UnidosUS. “We urge the Bureau to consider our coalition’s proposed actions, which will improve transparency, enhance competition, and allow consumers to comparison shop more effectively. Such common sense proposals will also allow consumers to keep more of their money and be better positioned to help their families abroad.”

The CFPB can protect consumers from hidden and predatory fees by highlighting and mandating two simple disclosures: the “total cost” of the remittance (which must include all fees and exchange rate margins), and the “total amount to be received” (which must be the amount the recipient will receive after all fees have been deducted). Strictly regulating and simplifying these key disclosures will provide essential information and important protections to remittance senders. 

Ensuring that remittance costs are kept reasonable and low will make a significant difference to low-income consumers. The Financial Health Network’s analysis shows that remittance users in the United States could save billions of dollars if remittance fees were lower and more transparent. 

“Remittance disclosures should require that two numbers be highlighted: the total cost of the remittance (including the money sent plus all fees, taxes, and any exchange rate margin), and the total amount to be received (the exact amount that will be delivered to the recipient in the foreign currency, after all fees and taxes have been deducted),” said Ann Baddour, director of the Fair Financial Services Project at Texas Appleseed.

Related Resources

• Consumer Groups to CFPB—Please Act to Reduce Junk Fees in International Remittances, Aug. 23, 2024
• Group Letter to CFPB on Recommendations to Make International Remittance Pricing More Transparent, May 1, 2023
• Letter to CFPB Requesting a Review of Current Regulations to Improve Usefulness and Transparency of Remittance Disclosures, Jan. 11, 2023