Treasury Aide Tours New Mexico CU in Effort to Boost Remittance Program

SANTA FE, N.M. – The Treasury Department, eager to stoke competition on remittance services among banks and credit unions, took its road show to New Mexico this month with a tour of Guadalupe CU here, the only CU in the state offering the IRnet package offered by the World Council of Credit Unions. “I think the real news here is that Treasury recognizes that credit unions are the institutions that are most involved in reaching out to the public with these kinds of services,” noted Sylvia Lyon, president/CEO of the Credit Union Association of New Mexico. Lyon was commenting on a talk and press briefing by Randal Quarles, Treasury’s assistant secretary for international affairs, who met with the Guadalupe staff Oct 14 “to see the international remittance process in action.” Guadalupe is one of 200 CUs, many in neighboring Arizona and California, using the IRnet network but progress has been slow in getting larger numbers of CUs to sign up. Indeed, Lyon said her league does plan to promote IRnet with workshops in 2005 but because of cost, collateral and operational factors the actual number of CUs joining the program may “realistically only reach 10.” Quarles, who said he was “impressed” by the work done at Guadalupe in making a “real difference” to immigrants, stressed the huge worldwide potential for remittance growth considering $14 billion alone has gone back to Mexico this year. The Treasury aide, a former U.S. Executive Director of the International Monetary Fund, explained that remittances are part of a larger international development agenda and that Treasury has focused on encouraging more financial institutions to get involved in the process. The World Council, which helped arrange the Quarles visit, said the Treasury visit represents “a testament to the commitment” of the government “to support low-cost alternatives to conventional remittance products.” U.S. CUs offering IRnet, said WOCCU, have “an incredible opportunity to reach out to traditionally underserved people in their communities because the people most likely to send remittances are the people least likely to have safe and affordable places to save and borrow.” In promoting IRnet, Lyon said the “commitment” in manpower and language training by New Mexico CUs to undertake IRnet can be extensive, making it harder for CUs to sign on. “It’s a hard sell” considering the break-even or loss factors, confided Lyon. Still, she said, it is significant that a Treasury executive made a trip to her state to plug remittance services underscoring the new-found reliance the government places on CUs to reach the underserved. Banks may be asked to shoulder the job too, but the Quarles visit underscores the importance of CUs, she said. -