Editorial Support Lines up for Remittance Cap in Key Ontario Papers

ACORN Canada fighting for Justice in Remittances

Delhi   With the introduction of a member’s bill in the provincial parliament of Ontario by New Democratic Party MPP Jagmeet Singh from Toronto to amend the Consumer Act to put a 5% hard cap ceiling on remittances as requested by ACORN International and ACORN Canada as part of the Remittance Justice Campaign, support is lining up for the bill.  The influential Toronto Sun editorialized in favor and the Ottawa Citizen joined in the call for support for the measure.

The Ottawa Citizen had an interesting take with a conservative twist:

The best way to drive costs down is to encourage competition. For some recipient countries, new players and technologies have led to better prices. For others, there’s an oligopoly and high prices. It seems unlikely that the most punitive fees will come down without regulation.

In 2009, the G8 vowed to bring global costs for remittances down to five per cent by 2014. Market-based approaches, such as greater transparency in fee structures, are crucial to this effort. But they haven’t brought fees down very far.

The Citizen got it.  The standard business ideology may make predatory practices and glib assurances standard operating procedure, but when such rapaciousness cannot be impacted by fairness, it is time for legislation and regulation.

The Toronto Star started perhaps in a better place of understanding the importance of remittances and the cost structure, but they also made a powerful point:  all parties needed to support the legislation.  In other words this is too important to allow narrow partisanship to stand in the way and allow Money Gram and Western Union to fleece the pockets of migrant and immigrant workers.

No other province caps remittance fees, but the idea is no different in principle from limiting the interest charged on payday loans to prevent low-income earners from being gouged. Ontario did that in 2008.

All parties at Queen’s Park should back Singh’s bill. It would be an excellent step toward helping out some of the hardest working and most deserving people among us.

The same arguments could be made throughout the world, but for now the momentum is building in Canada where the leadership is, and the quick editorial support puts the pressure on for change!

Check out ACORN International for more information on remittance campaigns and how you can help.

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A Corrupt Credit Business Model Travels to Chile and Brazil

New Orleans Cred

ODECU of Chile
ODECU of Chile

it card scams are the bad penny perfected in the United States that is turning up now elsewhere in the world.   These practices are not the foul play of bad actors as predatory lenders always claim, but intrinsic elements of corrupt, exploitive business models.  The economic success stories in Brazil and Chile now seem threatened by the avarice of casual corporate corruption matched as usual with light to non-existent regulation and consumer protection regimes.

In Brazil the debt to income ratio has risen from 22% to 40% in only five years from 2006 to 2011 according to a study quoted by Alexei Barrionuevo in The New York Times. In Chile in 7 years the ratio has goen to 70% according to the Central Bank.   There’s no question the model is predatory with interest annual interest rates reaching 220% in Brazil and no limits anywhere it seems.   The situation is especially intense at retail chain, freely issuing cards to working and moderate income customers to access basic consumer goods, and then routinely adjusting the terms and levels of the interest rates on the debt without any notice to the customer.

These cards were supported by transnational banking big boys like UK’s HSBC and Spain’s Santander and Itau-Unibanco, all of which, especially HSBC, absolutely knew better, but couldn’t resist the rip-off, knowing that they could get away with it.  When confronted by the prosecutor’s office in Brazil, the banks ignored appeals to fully compensate customers.

It was shocking to read that there are no only no limits to the level of interest rates in Chile, but also no way for an individual to be able to file for personal bankruptcy and get their act together.  Unfortunately, when ripped, there’s no way for them to run – or reorganize.  Stefan Larenas of the Organization of Consumers and Users of Chile, speaking about the Equifax-owned, unregulated Dicom credit score outfit in that country, was quoted ominously that, “If you are in Dicom, if you are not in hell, you are on the way there.  It is a true social stigma here.”  Seems a bad score not only bars you from any future loans, but is also seen as a legitimate reason to block you from future employment, creating a debtor’s prison without walls.

Predatory financial injustice is a global issue with most central banks simply burying their heads in the sand, just as our Remittance Justice Campaign has uncovered everywhere, and leaving workers and families nothing but fresh meet for corporate crime.

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