House Bill Slaps 37% Fee on Immigrant Remittances
New fee threatens remittance lifeline for immigrants and developing nations.
WASHINGTON — A bill introduced in the House of Representatives on January 15, 2025, seeks to bolster border security through a steep fee on remittance transfers, a move that could significantly affect immigrants in the United States and the economies of numerous countries reliant on these funds. The Border Security Investment Act, or H.R. 445, proposes a 37% fee on money transfers sent to specific countries, potentially disrupting the financial lifeline for immigrant communities and nations abroad.
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Sponsored by Rep. Jim Moran, R-Texas, and co-sponsored by six other Republican representatives, the legislation targets remittances sent through money services businesses to the five countries with the highest number of citizens or nationals unlawfully entering the U.S. in the prior fiscal year, as determined by U.S. Customs and Border Protection.
The collected fees would be evenly divided between two trust funds: the Border Security State Reimbursement Trust Fund, which would reimburse border states for expenses related to border security enforcement, and the Border Security Trust Fund, which would finance technology, physical barriers, and salaries for U.S. Border Patrol agents along the U.S.-Mexico border. Excess funds beyond $50 billion would be redirected to the Treasury’s general fund for deficit reduction.
For immigrants, particularly those from Latin American countries frequently linked to border security debates, the 37% fee could create significant financial hardship. Remittances are vital for families in nations like Mexico, Guatemala, and Honduras, supporting essentials such as food, housing, and education.
The fee would raise the cost of sending money abroad, reducing the amount immigrants can afford to send. For instance, a $100 transfer would incur a $37 fee, leaving only $63 for the recipient. This could force immigrants, many in low-wage jobs, to cut personal expenses or send less money, straining their financial stability.
The bill’s focus on countries with high rates of unlawful U.S. entries could disproportionately impact Latino immigrants, who constitute a large share of remittance senders.
Critics warn that the fee might push immigrants toward unregulated, cash-based systems, which are riskier and harder to monitor. If enacted, the bill would take effect within 30 days, leaving little time for immigrants to adapt. The legislation, referred to the House Committee on Homeland Security and the Committee on Financial Services, faces an uncertain path in a divided Congress.
Beyond its impact on U.S. immigrants, the bill could disrupt economies worldwide. Remittances are a critical income source for many developing nations, often surpassing foreign direct investment and official development assistance.
In 2023, 78 countries had remittance inflows exceeding 5% of their GDP, with 25 countries relying on remittances for over 15% of their GDP, according to World Bank data. Notable examples include Tajikistan (48% of GDP), Tonga (41%), Samoa (32%), Lebanon (28%), and Nicaragua (27%). These funds support household needs and contribute to economic stability, reducing poverty and funding small businesses.
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A reduction in remittances due to the proposed fee could destabilize these economies, potentially increasing migration pressures as families lose vital support. For instance, in Mexico, the second-largest remittance recipient globally with $68 billion in 2024, remittances account for a significant portion of household income, particularly in states like Michoacán, where they represent 24.5% of GDP. A drop in these funds could exacerbate economic challenges, prompting more migration rather than deterring it.
Supporters argue the fee would fund measures to curb illegal immigration, but opponents contend it penalizes legal residents and citizens while failing to address migration’s root causes, such as poverty and violence. The bill’s potential to disrupt remittances could also strain diplomatic relations with affected countries, many of which rely on these flows to sustain their economies.
As H.R. 445 advances, it will likely ignite debate over balancing border security with the economic realities of immigrant communities and the global impact on remittance-dependent nations.