Immigrants From Latin America and Africa Squeezed as Banks Curtail International Money Transfers
As government regulators crack down on the financing of terrorists and drug traffickers, many big banks are abandoning the business of transferring money from the United States to other countries, moves that are expected to reverse years of declines in the cost of immigrants sending money home to their families.
While Mexico may be most affected with more than $25 billion in remittances (sent from the US in 2012) the banks’ broad retreat over the last year is affecting other countries in Latin America and parts of Africa as well. The banks are being held accountable not only for the customers who directly use their money transfer services but also for their role in collecting remittances from money transmitting companies and wiring them abroad.
JpMorgan Chase and Bank of America have scrapped low-cost services that allowed Mexican immigrants to send money to their families across the border.
Regulators say the banking system was being exploited by terrorists and drug lords seeking to launder money. While they have not banned banks from engaging in higher-risk businesses like money transfers to certain countries, they acknowledge that banks must now invest significantly more to monitor the money moving through their systems or face substantial penalties.
Original story at The New York Times