Colin C. Richard[*]
International remittances—"cross-border person-to-person payments of relatively low value"[1] sent primarily by international migrants to family members in developing countries[2]—alleviate poverty, support entrepreneurship, and foster the development of financial systems.[3] Until recently, aside from prohibitions on financial interactions with countries such as Cuba or Burma,[4] U.S. regulators have only indirectly addressed these monetary transfers. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) changes this, providing direct, substantive regulation of the industry for the first time.[5] Dodd-Frank calls on the Board of Governors of the Federal Reserve System (Board) to craft more than a dozen regulations to enforce Dodd-Frank's remittance provisions within eighteen months.[6] These regulations can either stifle progress in the remittance industry or help it become more efficient.
This Article recommends regulations that would enable a thriving business environment for transfer providers and preserve reasonable consumer protections. Part I describes the international remittance industry, including its role in enabling economic development and in alleviating poverty. Part I then predicts the changes that the industry is likely to undergo in the near future. Part II explains Dodd-Frank's remittance provisions. Part III provides recommendations to the Board on how it can design regulations that best enable global economic development.
