Wade Rathke: Chief Organizer Blog » Remittances

Conversion Fees and Remittance Charges

jstuart — Sun, 21 Feb 2010 22:03:15 +0000

New Orleans Packing for the flight to Nairobi over Sunday and Monday, I read with interest a piece in the times about the usual run of charges that companies were charging for use of credit and debit cards outside of the boundaries of the USA covered in the “Your Money” column in the Times by Ron Lieber. With other credit card reforms going into effect now, Lieber – and I dare say the rest of us – didn’t get why many credit card companies are in some cases charging 3% of the total transaction for a simple conversion from whatever the local currency might be into dollars.

Lieber’s slant was that these travelers were thought to be high end and corporate, so in essence Congress was turning a blind eye in their direction in order to allow many of the credit card companies to pick up some excess profits since they were taking them off the gravy train on some of their predatory rip-offs. His best guess was that the risk was very low: 7 cents on $100.00 against the normal charge of $3 on $100.00!

I notice these charges all of the time on the trail for ACORN International, and they gall me to no end, not being rich and not wanting to carry more cash around than makes prudent sense. I also am in the great country of Canada 3 to 5 times a year and it is absurd for the credit card companies – which are huge there – to act like they are in the deepest depths of some rain forest somewhere and a target for fraud. Come on!

When I read someone like Lieber speak about how easy all of this processing is for these giant credit card companies — many of which are of course bank run now through Chase, Citi, American Express, etc – it also reminds me why these charges should also be reduced for remittances the same way. There’s really no reason for paying so much freight for a simple electronic transfer of funds!

But, Lieber is right. Congress may not be hearing from the business traveler and the well to do, and it’s a cinch they are not carrying about the migrant workers trying to send money back to their families in the home country.

What does it take to force credit and debit folks to learn about equity.

One happy note: big props to Capitol One (where I have my money and where I have a debit/credit card) because they DO NOT CHARGE this ridiculous surcharge. They said something to the reporter about caring about the customer. Hey now!

Small Scotia Steps on Remittances

jstuart — Tue, 02 Feb 2010 17:30:00 +0000

New Orleans Handling remittances from working immigrant families is such a lucrative business that progress is measured in very small steps. We were delighted to take one with Scotia Bank when they announced in Toronto that they were lowering costs for remittances from their account holders using a combination of their online access and a partnership with Western Union. ACORN Canada had made this demand as part of the back-and-forth last summer in Community Organizations International / ACORN International’s first multinational campaign focusing on remittances. We were delighted that they made this concession to us, but….

It’s hard to be happy even with a small victory because there is so much more. Even with the online capacity being installed for Scotia customers, the costs are still way out of line with the reality of the bank’s costs, making this a huge profit center, and therefore almost certainly predatory.

Scotia now trumpets that it will charge $9.00 plus 1% on any transaction. On $100 bucks the minimum charge would be $10.00 or 10% of the total transaction. Oh, no, that’s not right!

On the Scotia website they advertise the savings:

$10.20 from Toronto to China on a $580 remittance
$16.80 from Montreal to USA on a $420 remittance
$4.00 from Calgary to Philippines on a $100 remittance
$7.80 from Toronto to India on a $320 remittance
$7.70 from Vancouver to Jamaica on a $130 remittance

Since most of this is being done via Western Union, the real revelation when you examine these new Scotia transfer cost savings is how much Western Union is charging for what should be trivial transfers within the region, like the ones from Montreal to the USA, which is next door, or Vancouver to Jamaica which is right off the Florida coast. Normally, a transaction would have cost another 3% from Canada to USA and another 6% to Jamaica. Of course there is another 4% they are making on the Philippines without this new Scotia reform. The savings in the other countries are fairly trivial, though not insignificant to China and India, but as Scotia’s advertising folks boost the level of the remittance to $300 and $500 plus, all of us can tell what is going on.

But, let’s celebrate the small victory with Scotia, since there are many large banks that have not yet conceded this much, and let’s keep in mind how long we – just like this money – are still forced to travel to really win significant savings.

Western Union is obviously at the heart of this issue!

Colors and Dawn on the Marcala Mountains

dine — Sat, 23 Jan 2010 16:02:23 +0000

Marcala In an afterthought I had thrown a small flashlight in my bag. You never know. As Tim sings, “there’s the cowboy in us all,” and with me there’s still a boy scout deep down riding alongside I guess. Good thing. We had driven up the mountains from Marcala in pitch dark to where our team was being housed for the night. Arriving we could see the large porch of the recently finished brick and concrete structure until the car lights went out, then nada but the half-moon and stars. One lone candle was lit in the middle of the room where we enjoyed sweet tea – organico, as they kept saying – after plopping our bags on the bare concrete floor. A little later when we were led down a rough path to a cabin, the absence of running water and electricity faded next to the joyful surprise at finding a nice bunk bed with clean sheets. Hey, it’s the little things that count. I slept like a baby in the pitch dark until the predawn when I woke with the campesinos to see the morning light come over the green dotted fog of the mountain sides.

We had started the day at eight in a makeshift meeting room in the hotel chapel with many of our union brothers as well as several new companeros from NGOs and the University. For hours one after another listed the issues in and around San Pedro Sula that needed attention and organizational activity: water, remittances, housing, public services. It was a long list delivered in lengthy and passionate speeches listened to respectfully by all interrupted only by the appearance of a Channel 39 TV reporter who had heard the discussion was going on and that I was in town. At noon we drove through some of the colonias including one fascinating development some of my union brothers showed me where the union had built the houses and the school. This was only minutes away from a new highrise condo development abutting one piece of a small creek in San Pedro Sula. Another sign down the road indicated the future would be filled with these luxury developments, the first in the city. Another five minutes away and we were looking at a squatters development along a larger riverbank where families had been forced after Hurricane Mitch’s devastation in Honduras, as still remained. Driving away we could see children swimming as their mothers washed their clothes in the calmer pools of the stream

Next stop was a quick lunch and visit with a woman and her family who had graciously invited us over for pico gallo in the Honduran style with red beans. The reason in the interconnected world of organizing: her sister had been a member of ACORN in the Queens. Anything she could do to help, just ask.

Though there seemed to be no hurry to the drive, and it was a good thing since construction and 18-wheelers had us parking for long stretches as we crossed the mountains on the good highway from San Pedro Sula to Tegucigalpa, we parked in Marcala in one of the barrios and followed the noise and music into a giant structure just in time for a young political theater company to begin their presentation. There were several hundred children and a score of adults in the crowd, as the moderator shouted, “Silencio!” over and over to gain attention. Suyapa explained to me that this was part of a celebration for the women in the community, but the theater company brought much more to it.

This was a well acted and rehearsed production by a half-dozen enthusiastic late teen or early 20’s actors. In the beginning a “generalito” – small general – with his lieutenant wanted everything to be gray, gray, gray, and the three citizens, two women and one man, lived in gray huts in fear. As the play developed to great humor and passion from the actors and increasingly the crowd as they warmed to the theme, the caricature soldiers in the face paint of Batman’s Joker gradually lost control. Singing and dancing would erupt and pull the people off of their knees to find that they could walk and be happy again. At the same time their huts turned from gray to white, pink, and green. A giant bride dressed in white appeared on stilts and danced along as well. A toy cannon exploded and led the soldier to defect to the people until the generalito was deflated with the air escaping from him like wind from a bag. More singing ensued. Children were pulled from the crowd. Marching and dancing. My summary doesn’t do the play or the skill and quality of the actors justice for this hour long presentation, but it was one of the few times where one had the feeling people were staying for the action and not the frijoles and tortillas passed out to all of us with plastic cups of weak coffee at the end of the show.

There may have been a fake election in Honduras to try to rightsize the military coup, but the scars will wear deep among these people. When the elected president announced on my first day in country that he was agreeing to go into exile in the Dominican Republic there was no celebration about his volunteering to take the first step to “reconciliation.” It seemed hollow, and this children’s play with its well practiced themes and smooth presentation was hardly designed for this one show, but was traveling around the country.

All of these things were on our minds as our eyes closed in the dark last night. We were staying at the unfinished compound organized as a project to support the campesinos in this area.

It was an honor and a gift to have lived this day!

Poor Give More

jstuart — Mon, 25 May 2009 15:03:59 +0000

Ocean Springs The poor are more generous that the rich, and in fact the poorer you are, the more likely a larger portion of your income is given to others. For the poor experience drives empathy and action. For the rich it turns out that talk is in fact cheap.

Quoting from Frank Greve of the McClatchy chain in an article recently entitled, “America’s Poor are its Most Generous Givers,”

“The lowest-income fifth (of the population) always give at more than their capacity,” said Virginia Hodgkinson, former vice president for research at Independent Sector, a Washington-based association of major nonprofit agencies. “The next two-fifths give at capacity, and those above that are capable of giving two or three times more than they give.”

That’s an elegantly generous way of putting it, I guess? Greve also quotes the brutal facts from the BLS indicating that the poorest of our citizens are in fact twice as generous as the top strata of the rich.

“Indeed, the U.S. Bureau of Labor Statistics’ latest survey of consumer expenditure found that the poorest fifth of America’s households contributed an average of 4.3 percent of their incomes to charitable organizations in 2007. The richest fifth gave at less than half that rate, 2.1 percent.”

In all likelihood this doesn’t come near to counting remittances sent home by migrant workers and immigrant families to their families and relatives in their home country which adds up to billions more per year.

It seems the only way in which the rich outstrip the poor is in public relations. Even though fewer are giving and they are giving the least, buildings are named after them, banquets held in their honor, plaques engraves, and gushing thank you notes sent. Furthermore, they lobby for more tax deductions so that their generosity (when given) also returns more benefits to them. Some are still obnoxiously quoted on those issues as saying they know better than the government and others how to express their charity.

Meanwhile even with their last dollar, poor extend a helping hand for their brothers and sisters. In collecting membership dues to support building organizations among the poor in American and around the world, outsiders and donors are often skeptical when they learn that the poor still make it a priority to support their own organizations.

Just more evidence that we should not be surprised.

Remittances Reform

wade — Fri, 17 Apr 2009 14:54:17 +0000

Santiago Remittances are the lifeblood of many of the ACORN International communities from Canada to Mexico to India to Kenya, and it was not long into the conversation among all of our organizers before the a campaign and the actions that would bring it to life started to take shape. After years of poking around on this issue around the borders, with various products, and across communities, the members’ patience was exhausted. It is past time for serious work and action here.
Luckily, I had also had a recent — and important — conversation with Francis Calpotura who directs TIGRA, an impressive effort with an increasingly far reach around this issue. We had discussed increasing the involvement of ACORN International as a partner in the campaign and possibly even acting as lead countries in various locations. This alliance could be important in moving forward.
It wasn’t long before HSBC and Citi were both emerging as primary targets with their deep presence in Mexico, Canada and virtually every one of our countries. They are institutions where we have a high degree of familiarity and their inability to even level out the costs within their subsidiaries is grating.
A lot of work and research now needs to be done, but an aggressive timetable to kickoff in mid-June was set and suddenly the meeting was taking an important and wonderful turn for the future of the federated organizations acting as ACORN International.