The United States has long been a nation of immigrants, shaped by the courageous people who left their homes, lives, and loved ones in search of refuge and opportunity. Immigrants have been the foundation of the United States’ growth and development.
We honor and celebrate the achievements and aspirations of Latin American and Hispanic communities, whose contributions continue to shape our nation, during National Hispanic Heritage Month. Both the U.S. economy and the economies of their countries of origin benefit from their perseverance, dedication, and hard work.
Remittances: A Lifeline and a Legacy
Remittances tell a powerful story of sacrifice and hope. These transfers of money, sent by people living and working in the U.S. to their families in their home countries, are a vital part of many people’s lives. Remittances have helped families gain access to better education, healthcare, and opportunities for growth in the future for decades. In 2023 alone, remittances to Latin America and the Caribbean reached $155 billion. After India, Mexico is the world’s second-largest recipient of remittances, with over $66 billion. Despite this crucial financial support, the cost of sending remittances remains high, with fees averaging 6.35% per transaction. This is more than double the United Nations’ target to reduce remittance costs to below 3% by 2030.
Why price transparency matters
For Hispanic and Latin American communities to be able to send money home without being unfairly burdened by excessive fees, transparent pricing is essential. Today, the remittance market faces significant challenges due to inconsistent pricing practices and hidden fees, which make meaningful price comparisons difficult. Many people remain unaware of the true costs associated with sending, spending, or receiving money internationally. This is largely due to international money transfer providers misleading consumers by advertising low or no fees while hiding additional fees within inflated exchange rates.
In the past three years, Americans have lost $15.4 billion to hidden exchange rate mark-ups, with half of these losses concentrated in just four states: California, Texas, Florida, and New York—states with large Hispanic and Latino populations. In 2023, Californians alone lost $1.1 billion due to these markups, more than any other state.
A UnidosUS survey found that 67% of Latinos either didn’t know remittance providers could add fees through exchange rate mark-ups or weren’t sure. This lack of awareness makes it difficult for people to understand the true cost of transferring money internationally, leaving them vulnerable to hidden fees. In addition to preventing competition, these practices artificially raise prices.
Eliminating hidden fees in remittances
The U.S. is taking important steps to address these issues. In March 2024, the Consumer Financial Protection Bureau (CFPB) issued a warning to remittance providers and banks, stating that marketing “no fee” or “free” transfers while hiding fees in exchange rates may violate federal law. Policymakers, like Senator Elizabeth Warren, have long called for more open pricing for remittances. Last year, the Congressional Hispanic Caucus urged the CFPB to take further action to eliminate hidden remittance fees, urging the need for transparency.
A coalition of consumer and immigration advocacy groups has also been working toward greater transparency in remittances. These organizations requested that the CFPB take action to address hidden fees in a letter sent in 2021. They recommended adopting Best Practice Guidance in 2023, reiterating the necessity of continuing efforts. More recently, they urged the CFPB to take decisive action to eliminate hidden fees entirely, rather than just regulating deceptive marketing practices. Additionally, the Financial Technology Association (FTA) has expressed support for increased exchange rate mark-up transparency.
Why price transparency matters more than ever
It is more important than ever to emphasize the crucial role that remittances play in supporting families across borders and to advocate for transparent pricing for these financial transactions during Hispanic Heritage Month, which is an annual celebration that honors the history, culture, contributions, and achievements of the Hispanic and Latino communities in the United States. At Wise, our global LatinX Wisers Network —a voluntary, employee-led group—is a space where Hispanic and Latin American Wisers and allies foster community, culture, and diversity. Embracing this year’s theme, “Pioneers of Change: Shaping the Future Together,” we recognize that by raising awareness and advocating for price transparency, we can ensure that remittance senders are not unfairly burdened by hidden fees. By doing so, we empower communities to shape a more equitable future, helping remittances go further to benefit families both in the U.S. and abroad.
