Financial trade advocates wrote to House officials opposing legislation that would impose a 5 percent tax on cross-border remittances to fund the completion of President Donald Trump’s proposed wall along the U.S.-Mexican border.
H.R. 85, known as the “Fund and Complete the Border Wall Act,” was introduced by Rep. Andy Biggs (R-Ariz.) with support from 10 Republican co-sponsors. The trade associations argued that the bill could have negative consequences for law enforcement and consumers.
“As a matter of principle, taxes on consumer financial products and services are bad policy, no matter what the stated goal,” the groups wrote. “The consumer tax in H.R. 85 would increase the cost of remittance transfers, driving consumers out of regulated financial services and forcing these money flows underground.”
The groups also argued that the legislation could lead to many consumers turning to less regulated financial avenues to transfer funds across the southern border of the U.S. Such transfers would not have the benefits offered by banks and money services businesses, which are required to notify law enforcement officials and regulators of suspicious and possibly illegal activities.
“When consumers utilize banks and other regulated financial institutions for remittance transfers – firms that have robust anti-money laundering programs – it provides law enforcement and financial regulators visibility into potentially illegal activities,” the groups wrote. “Policies that encourage alternative channels reduce transparency and the ability to properly monitor transactions.”
The letter was endorsed by the American Bankers Association, the Consumer Bankers Association, the Electronic Transactions Association, the Bank Policy Institute, the Independent Community Bankers of America, the Money Services Business Association, the Money Services Round Table and the National Money Transmitters Association.