‘Lot of Latitude’
Regulators have “a lot of a latitude here, so I can’t speculate on the impact on business,” said Tim Daly, senior vice president for government relations at Englewood, Colorado- based Western Union.
Remittance companies make money from fees and exchange rates. A Western Union customer who wants to send $100 to Mexico pays a $9.99 fee in the U.S., according to the company’s website. The recipient in Mexico would get pesos, and Western Union would make additional money on the spread between the wholesale and retail exchange rates.
The spread’s role in remittance costs has long been an issue. Western Union in 2000 agreed to change some practices and pay more than $400 million, mostly to Mexican immigrants in the United States, to settle a lawsuit alleging that the company’s advertising falsely represented the costs. Western Union resolved the claims without admitting or denying wrongdoing.
“What we did temporarily through litigation would be much better done via regulation,” said Matthew Piers, a lawyer with Hughes Socol Piers Resnick & Dym in Chicago, which brought the lawsuit on behalf of a group of immigrants from Mexico.
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