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Summary of our “Past Time for Remittance Justice” Report
Remittances, which begin as simple financial transfers from an immigrant or a migrant worker thousands of miles away to their families back home, are not only lifeblood to their relatives and communities in the home country, but also are frequently critical to the entire national economy of whole countries. According to the Inter-American Development Bank remittances are a significant component of many developing countries’ GNP and far outstrip inputs of foreign aid or private investment from other countries.
Over and over, the countries where ACORN International members and partners live come up high on the list of remittance beneficiaries: India, Mexico, Honduras, Dominican Republic, Kenya, Philippines and Korea, especially. This matters to us in a deeply personal and very national way in both our home countries and our adopted countries where we have family. Clearly, remittances are valuable to immigrant families and their relatives. There are many developing countries where a primary export is migrant labor and a critical import is remittance dollars. Yet, central banks and global financial institutions seem impotent in the face of money transfer organizations and banks.
ACORN International has come up with a remittance grid which shows the costs that are attached to sending money overseas. We found that most of these costs are hidden, some even unavailable to the general public. We focused on ten (10) countries in which ACORN International has head offices and/or we are partnered with. We chose several major institutions of both the United States and Canada and gathered data on what costs are attached to sending a $100 remittance from Toronto, Canada or New Orleans, Louisiana, in Canadian and American Dollars respectively to the ten countries where we work. We choose $100 because it is most common according to both our members and outside studies.
Following our research, the cost of sending (often excluding pick-up costs) the 100 dollars varies depending on type of transfer speed and delivery options. Some institutions have extra costs attached such as “communication” or “processing” fees. There is also an exchange rate charge where the individual institutions profit after the 100 dollars is sent when they exchange the Canadian or American dollars into the currency appropriate for the recipient country. This is calculated by subtracting the institution’s exchange rate from the general exchange rate. Sometimes the difference is not much. At other times however, the cost is quite steep, especially when in conjunction with the other costs involved.
A dramatic example from our investigation is Bank of America: To send US$ 100 to Kenya with Bank of America, it can cost US$ 45 transfer fee + US$ 16 pick-up fee. On top of this, the sender could lose $13 from the remittance due to the exchange rate. So the immigrant or migrant worker is paying almost $75 to send US$ 25 back to their families at home.
ACORN International has concluded that to advance remittance justice and citizen wealth for our members we need the architecture of a three pronged effort:
(1) Transparency: We have exposed the real costs and fees in as clear a manner as possible so that there is no question of the predatory nature of the enterprises and how various actors played their roles in thwarting fair and just pricing.
(2) Regulation: We have to determine why such institutional anarchy exists. Is there any force to global financial bodies like the World Bank or International Monetary Fund or G8 and other deliberations? And, if so, can it be applied to remittances for immigrant families and migrant workers? If global institutions are inadequate, what is the role, if any, being played by national central banking institutions in either developed or developing countries or their states and provinces? How can we get movement for accountability, regulation, and reform?
(3) Pressure: We and our partners have to encourage and enforce negotiations, pursing both agreements with institutions and the promulgation of policies and programs wherever possible with regulators to achieve reform.
Tiempo Pasado para la Justicia de Remesas
Como la suma total de pequeños sacrificios, las remesas, que empiezan como simples transferencias de dinero de un inmigrante o trabajador migrante, a miles de kilómetros de su familia y de su país de origen, no son solo de vital importancia para sus familias y comunidades, sino que son una fuente critica para la economía nacional del país de origen de aquél. De acuerdo con el Banco Inter-Americano de Desarrollo, las remesas son un componente necesario del PNB de muchos países en vías de desarrollo y hasta superan los insumos de asistencia económica del exterior o inversiones privadas de otros países.
Una y otra vez los países donde viven miembros y afiliados de ACORN International, aparecen en la lista de beneficiarias de remesas: India, Méjico, Honduras, Republica Dominicana, Kenia, Filipinas y Corea, especialmente. Esto tiene gran importancia personal y nacional para nosotros en nuestros países de origen y nuestros países adoptivos donde tenemos familia. Claramente, las remesas son valiosas para las familias inmigrantes y sus parientes. Hay muchos países en vías de desarrollo donde uno de los principales ‘artículos’ de exportación es el trabajo migratorio y las remesas en dólares son una de las importaciones mas criticas. Y aun así, los bancos centrales y las instituciones financieras mundiales parecen impotentes al ser enfrentados con bancos y organizaciones de transferencia de dinero.
ACORN International construyó una tabla de remesas que muestra los costos ligados a enviar dinero al extranjero. La mayoría de estos costos están ocultos y algunos, incluso, no están disponibles al público. Nos concentramos en diez (10) países en los que ACORN International tiene oficinas y/o afiliados. ACORN International enfocó el estudio en las principales instituciones financieras de Estados Unidos y Canadá. Recolectamos información de los costos asociados a enviar remesas de 100 dólares canadienses desde Toronto, Canadá, y/o 100 dólares americanos desde Nueva Orleans, Luisiana hacia los diez países donde ACORN International trabaja y/o tiene miembros. Elegimos 100 dólares ya que es la suma comúnmente enviada, de acuerdo con nuestros miembros y otros estudios.
De acuerdo a nuestra investigación, estos costos no incluyen las comisiones por recibir tales cantidades. En algunas instituciones, el precio varía dependiendo de la velocidad de la transferencia y las opciones de entrega. Otras, tienen costos extras como, por ejemplo, comisiones por “comunicación” o “procesamiento.” Luego de realizar el cambio a la moneda del país receptor, la diferencia por tipo de cambio también se convierte en ganancia para estas instituciones. Este costo se calcula restando el tipo de cambio de cada institución al cambio oficial. A veces esta diferencia no es grande. Otras veces, sin embargo, el costo es abismal, especialmente en conjunto con el resto de las comisiones involucradas en este tipo de operaciones.
Un ejemplo dramático es el del caso del Banco de América en Estados Unidos, el cual cobra $45 por enviar $100 a Kenia. Además, hay una comisión de $16 por recibir tal dinero. $13 son también perdidos luego de realizar el cambio de moneda. Es decir, que al inmigrante o trabajador migratorio le cuesta $75 para enviar $25 a su familia en Kenia.
ACORN International concluyó que para promover justicia en remesas y riqueza popular para nuestros miembros necesitamos la arquitectura de tres prolongados esfuerzos:
- Transparencia: Los reales costos y comisiones han sido expuestos de la manera más clara posible para que no haya ninguna duda sobre la naturaleza predatoria de las empresas ni de como varios actores desempeñan su papel para impedir una fijación de precios justa y razonable.
- Regulación: Tenemos que determinar por qué existe tal anarquía institucional. Hay algún cuerpo de los organismos financieros mundiales como el Banco Mundial o el Fondo Monetario Internacional o el G8 y otras deliberaciones? Y, en ese caso, podría ser aplicado a remesas para familias inmigrantes y trabajadores migratorios? Si las instituciones globales son inadecuadas, cuál es el rol, si alguno, de las instituciones nacionales de la banca central tanto en los países desarrollados como en los países en vías de desarrollo? Como podemos lograr rendición de cuentas, regulación y reforma?
- Presión: Junto a nuestros afiliados debemos promover la Campaña para la Justicia de Remesas fomentando y haciendo cumplir negociaciones, demandando acuerdos con instituciones y promulgación de políticas y programas con reguladores donde sea posible.
Interview by the Chinese News
Read the interview by Eric Emin from the Chinese News on:
http://www.chinesenewsgroup.com/SMPApp/design/article.jsp?cate=1&artId=22504
ACORN Hondouras Report
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Reporte 7, 2010
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Tiempo: En el parque hacen campaña “Por la Justicia de las Remesas”
SAN PEDRO SULA – Representantes de Acorn International denunciaron esta mañana que las empresas intermediarias en el proceso de envío de remesas se quedan con 20 de cada 100 dólares enviados por los hondureños en el extranjero.Acorn International es una federación asentada en varios países y que acoge a representantes de comunidades pobres. Esta mañana están realizando una Campaña por la Justicia de las Remesas.
Luis Martínez y Carlos Jiménez hicieron una exposición en el parque de San Pedro Sula, donde dijeron que las grandes firmas remesadoras son las que sacan las mayores ganancias con el movimiento de transferencias.
Original Article available at: http://www.tiempo.hn/inicio/item/854-en-el-parque-hacen-campa%C3%B1a-%E2%80%9Cpor-la-justicia-de-las
Toronto Star: Immigrants gouged on money transfers
They fought to get their landlords to clean up their cockroach-infested apartments and won. They fought to get payday lenders to lower their astronomical borrowing rates and won. Now ACORN Canada, a network of low-income Canadians, is embarking on its most ambitious project.
It has just launched a campaign to get North American banks to reduce the “predatory” fees they charge immigrants and migrant workers to transfer money to their families back home.
ACORN made its first move Monday. It released a report showing the rates charged by Canada’s chartered banks, their American counterparts and two money-transfer companies to send $100 to various destinations.
The figures were startling. Fees ranged from $3.70 to $66.25 (not including the pickup charges usually imposed at the receiving end).
Here is a sample, using a transfer of $100 from Toronto to Mexico:
• MoneyGram, which has the lowest fees, charges between $3 and $10 (depending on the service and destination) plus an exchange rate fee of 70 cents for a maximum total of $10.70.
• TD Canada Trust charges $35.91 for the same service.
• None of the other Canadian banks lists its exchange rate fee, making comparisons difficult. They divulge only their transfer fees, which range from $10 at Scotiabank to $25 at BMO. (CIBC refuses to provide any information.)
• The most expensive Canadian option is HSBC (Hong Kong and Shanghai Banking Corporation), which charges $25 to $30 for the transfer, tacks on a commission of $10 and adds an exchange rate fee of $10.84 for a maximum total of $50.84.
• In the United States, Bank of America tops the list. It charges $56.25 to $66.25 to send $100 from New Orleans to Mexico.
“These rates are predatory,” said Kay Bisnath of Scarborough, who serves as president of ACORN International. “Thousands of our members in Canada are affected.”
The Canadian Bankers Association defends its members’ remittance fees, pointing out that international transfers are complex and there are plenty of choices.
“Consumers are well served by this competition as they are able to choose a remittance service that best meets their needs and fits their budget,” said vice-president Nancy Fung.
To put Canada’s rates in context, the World Bank estimates the average global cost of transferring money between countries is 10 per cent of the amount sent. It has asked rich countries to reduce their rates to 5 per cent by 2014.
Ottawa has agreed in principle. But no Canadian bank is close to the current average, let alone the new target. And there’s no sign of action in Ottawa.
Remittances are a lucrative business. Immigrants and guest workers around the world send more than $400 billion back home every year. Canada’s share of the pie is roughly $15 billion.
Very little is known about these financial flows.
The government doesn’t regulate transfer charges. The banks charge whatever the market will bear. And immigrants rely on word of mouth to find out about hidden fees (for “communication” and “processing”) and costs on the other end.
ACORN used the personal experience of its members plus the legwork of four interns from George Brown College to compile its report. It doesn’t claim its survey is authoritative.
But it does argue there is enough evidence of exploitation to warrant government scrutiny and fee caps. “It is our hope to make it harder and harder for politicians and financiers to ignore the call for change and the demand for a fair and just remittance system.”
A delegation of ACORN members visited the head of TD Canada Trust this week to deliver its report and request a meeting.
They intend to approach all of Canada’s banks, federal financial regulators and provincial consumer protection authorities.
They don’t have much power or prominence. But they’ve swayed giants before.
English