OCC Publishes
Edition of Insights Addressing Remittances
The Office of the Comptroller of the Currency today
published an edition of Community Developments Insights addressing the
role of banks in providing money transfer services. “Remittances: A Gateway to Banking for Unbanked Immigrants”
describes how banks can use these products to attract unbanked immigrants into
the banking system. It also addresses
some of the key risks and regulatory issues presented by bank involvement in
these products.
“Remittances by immigrants to their home countries are a
potential entry point for a whole range of bank products,” said John D. Hawke,
Jr., Comptroller of the Currency. “When
consumers gain comfort with bank products, they are more likely to develop
additional financial skills that allow them to more fully benefit from the
American financial system.”
Many banks, especially those located in areas with
significant immigrant populations, have devoted major resources to capturing a
share of this growing market. According
to the Federal Reserve Board’s most recent Survey of Consumer Finances, 22
percent of minority households in the U.S. do not have a bank account.
A number of banks believe that by offering immigrants who do
not have banking relationships a product that they can immediately use, banks
will have an entry to cross-sell a variety of other bank products to these
consumers. Some banks have developed
accounts, designed specifically for recent arrivals to the U.S., that can be
easily linked to a remittance product.
The Treasury Department estimates that, on a worldwide level,
remittances sent by workers to their home countries exceeded $90 billion in
2003.
This edition of Community Developments Insights also
addresses a number of legal, compliance, and operational considerations that
financial institutions should be aware of when offering remittance
products. These include money
laundering, customer identification, and third party provider risk.
This Insights can be found on the news release page of
the OCC web site by going to www.occ.treas.gov
and clicking on the news release button on the left side of the page.
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