ALBANY, N.Y. - Licensing of individual remittance agents may beone method considered by New York legislators to protect consumersagainst abuses in the money-transfer industry. However, moreinformation still is needed to determine how to best proceed,legislators said. International remittance practices were thesubject of a recent legislative hearing sponsored by the New YorkState Assembly Standing Committee on Banks, the Assembly StandingCommittee on Consumer Affairs and Protection, the Assembly PuertoRican/Hispanic Task Force and the New York City Department ofConsumer Affairs. "We want to be active to respond to [financialindustry] concerns," said Assemblywoman Catherine Nolan, who chairsthe Standing Committee on Banks. "[Remittance] companies arelicensed, perhaps agents need to be licensed, too. I suspect we'llintroduce something in the upcoming session about licensingissues." "Testimony indicated that people who use remittancecompanies pay an extraordinary amount of money," said AssemblymanPeter M. Rivera. "Fifteen percent should not be the cost to sendmoney overseas, particularly when there are so many alternatives."Rivera said that he hopes to host a series of working meetings withvarious industry participants in the next few weeks to furtherinvestigate the subject. "We need a clear understanding of how thisbusiness works," he said. "We need to improve it so it's moreconsumer oriented. "I will be speaking to credit unions..Creditunions are doing a great job [on meeting consumer needs]," theassemblyman said. Big business-here and abroad According to figuresfrom the World Council of Credit Unions Inc., foreign-born personsliving in the United States send home an estimated $50 billion eachyear. In 2003, a record $13 billion is expected to be sent from theUnited States to Mexico alone. The Philippines follows Mexico asthe second largest recipient of money transfers from the UnitedStates-an estimated $4 billion annually. In 2002, roughly 27% ofthe gross domestic product (GDP) of Nicaragua was the result ofremittances. "Immigrants work hard to earn money to send back totheir home countries," said Pablo DeFilippi, manager and CEO, LowerEast Side People's FCU, who testified on behalf of the New YorkState Credit Union League Inc. and Affiliates at the Oct. 20, 2003hearing in New York. "In the process, [they] may be subject to aninternational remittance industry that charges high fees and offersconfusing disclosures, if any, to these low-income, financiallyun-savvy consumers." According to DeFilippi in his testimony, mostremittances occur as biweekly transfers of several hundred dollars.Initial transactions at most remittance agencies or majorwire-transfer companies, he said, can reach nearly $30 for a $300transfer, including check-cashing charges. Final costs can reachmore than $40 when figuring in the transmitter fee taken on theother end and the cost of a calling card to let family members knowthat money is on its way. As a positive alternative, DeFilippidiscussed services offered by credit unions, such as theInternational Remittance Network (IRnet), which allows the sametransaction to occur for $14. "The savings provided by IRnet canput, literally, millions of dollars back into the pockets ofhard-working people, so that they can feed, clothe and house theirfamilies, both here and in their home countries," DeFilippitestified. DeFilippi also urged legislators to consider formalguidelines regarding disclosure and pricing practices. The CreditUnion National Association has adopted its own guidelines, SevenPrinciples for Conducting Wire Transfers, which it hopes to see asa model for the whole industry. "We need legislation to fullydisclose fees on transactions, otherwise you never know what it'sgoing to cost you," DeFilippi said. While DeFilippi praised theinroads IRnet has made in reducing transaction fees - some U.S.banks have begun offering similar remittance pricing structures -he also urged more credit unions to become a part of the program.Currently, only 190 of the 9,875 U.S. credit unions offer the IRnetservice. "Credit unions need to step up to the plate and startmarketing this service effectively," he said. "We need tools tobetter educate people, and this is an easy way to provideinformation to potential new members..There's still a lot of workto be done to market the `credit union difference.'" According to arecent survey by the Inter-American Development Council, the mainreason cited by Latino immigrants for not using traditionalfinancial services is not being aware of the benefits of having achecking or savings account.