|COST OF REMITTANCES TO RISE AS BANKS CUT BACK ON SERVICES DUE TO NEW REGULATIONS|
Aruba, July 11, 2014 - The business of transferring money overseas from the U.S. is getting pricey, to the point that some major banks are not seeing the business there anymore.
New federal regulations aimed at cutting the flow that funds terrorists and drug trafficking organizations put increased pressure on banks to monitor the money moving through their systems or else face substantial penalties.
“This is transforming the business and may increase the costs of international money transfers,” Manuel Orozco, a senior fellow at the Inter-American Dialogue, a research group in Washington, told The New York Times.
Latin America, along with Africa, is expected to be the region hardest hit by the news, with Mexico alone accounting for nearly half of the $51.1 billion in remittances sent from the United States in 2012.
Banking giants JPMorgan Chase and Bank of America have both dropped their low-cost services that allowed Mexicans to send money home, and Spanish bank BBVA is purportedly mulling over selling off its unit that wires money to Mexico and across Latin America.
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