ALBANY, N.Y. - Licensing of individual remittance agents may be one method considered by New York legislators to protect consumers against abuses in the money-transfer industry. However, more information still is needed to determine how to best proceed, legislators said. International remittance practices were the subject of a recent legislative hearing sponsored by the New York State Assembly Standing Committee on Banks, the Assembly Standing Committee on Consumer Affairs and Protection, the Assembly Puerto Rican/Hispanic Task Force and the New York City Department of Consumer Affairs. "We want to be active to respond to [financial industry] concerns," said Assemblywoman Catherine Nolan, who chairs the Standing Committee on Banks. "[Remittance] companies are licensed, perhaps agents need to be licensed, too. I suspect we'll introduce something in the upcoming session about licensing issues." "Testimony indicated that people who use remittance companies pay an extraordinary amount of money," said Assemblyman Peter M. Rivera. "Fifteen percent should not be the cost to send money overseas, particularly when there are so many alternatives." Rivera said that he hopes to host a series of working meetings with various industry participants in the next few weeks to further investigate the subject. "We need a clear understanding of how this business works," he said. "We need to improve it so it's more consumer oriented. "I will be speaking to credit unions..Credit unions are doing a great job [on meeting consumer needs]," the assemblyman said. Big business-here and abroad According to figures from the World Council of Credit Unions Inc., foreign-born persons living in the United States send home an estimated $50 billion each year. In 2003, a record $13 billion is expected to be sent from the United States to Mexico alone. The Philippines follows Mexico as the second largest recipient of money transfers from the United States-an estimated $4 billion annually. In 2002, roughly 27% of the gross domestic product (GDP) of Nicaragua was the result of remittances. "Immigrants work hard to earn money to send back to their home countries," said Pablo DeFilippi, manager and CEO, Lower East Side People's FCU, who testified on behalf of the New York State Credit Union League Inc. and Affiliates at the Oct. 20, 2003 hearing in New York. "In the process, [they] may be subject to an international remittance industry that charges high fees and offers confusing disclosures, if any, to these low-income, financially un-savvy consumers." According to DeFilippi in his testimony, most remittances occur as biweekly transfers of several hundred dollars. Initial transactions at most remittance agencies or major wire-transfer companies, he said, can reach nearly $30 for a $300 transfer, including check-cashing charges. Final costs can reach more than $40 when figuring in the transmitter fee taken on the other end and the cost of a calling card to let family members know that money is on its way. As a positive alternative, DeFilippi discussed services offered by credit unions, such as the International Remittance Network (IRnet), which allows the same transaction to occur for $14. "The savings provided by IRnet can put, literally, millions of dollars back into the pockets of hard-working people, so that they can feed, clothe and house their families, both here and in their home countries," DeFilippi testified. DeFilippi also urged legislators to consider formal guidelines regarding disclosure and pricing practices. The Credit Union National Association has adopted its own guidelines, Seven Principles for Conducting Wire Transfers, which it hopes to see as a model for the whole industry. "We need legislation to fully disclose fees on transactions, otherwise you never know what it's going to cost you," DeFilippi said. While DeFilippi praised the inroads IRnet has made in reducing transaction fees - some U.S. banks have begun offering similar remittance pricing structures - he also urged more credit unions to become a part of the program. Currently, only 190 of the 9,875 U.S. credit unions offer the IRnet service. "Credit unions need to step up to the plate and start marketing this service effectively," he said. "We need tools to better educate people, and this is an easy way to provide information to potential new members..There's still a lot of work to be done to market the `credit union difference.'" According to a recent survey by the Inter-American Development Council, the main reason cited by Latino immigrants for not using traditional financial services is not being aware of the benefits of having a checking or savings account.