House Subcommittee Examines Remittances

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July 20, 2017

The Terrorism and Illicit Finance subcommittee of the U.S. House of Representatives Committee on Financial Services held a hearing July 18 to examine the regulations surrounding money service businesses (MSBs), or remittances, and the important role they play in impoverished communities overseas, to learn about informal remittance systems and potential terror finance exploitation of remittance networks. 

Among those testifying at the hearing, "Managing Terrorism Financing Risk in Remittances and Money Transfers," was Scott Paul, senior humanitarian policy advisor at Oxfam America, who emphasized the important role that remittances play in sustaining at-risk communities. "Remittances give people agency over their own lives," Paul noted. Matthew Oppenheimer, president and CEO of Remitly, testified that a recent survey of their customers revealed that "nearly all are using our service to send money intended to pay for the basic needs of their family members - housing, food, water, electricity, medical care, and education - basic things we take for granted in the United States but can be unattainable for millions living abroad." 

The hearing also touched on the issue of de-risking, and whether it forces charities and remitters into less transparent, unregulated money transfer channels, thus making the anti-terror finance regime ineffective. The subcommittee will seek to find ways to streamline remittance regulations in a way that will keep legitimate funds in legitimate channels, subcommittee members said. 

In his written testimony, Paul said, "[A] strategy that aims to maximize remittances, keep them within the formal financial system, and curb illicit financial flows will achieve the twin aims of poverty alleviation and combating the financing of terrorism. To do this, remittance services must be accessible, affordable, and accountable - both to law enforcement authorities and to the families sending and receiving money."