On May 28, the Senate Committee on Finance received a joint letter from several payments industry associations urging lawmakers to reject a proposed 3.5 percent tax on remittance transfers, which includes any transfer initiated by a consumer in the U.S. to a designated recipient outside of the U.S. In addition, the letter highlighted concerns about privacy and operational burdens associated with the tax proposal, noting that the proposal requires financial institutions to verify consumer citizenship information and involves processing and storing sensitive personal data like passport or social security numbers for millions of consumers in the U.S. The associations argued this measure would impose significant costs on financial institutions and invade U.S. citizens’ privacy, while driving some consumers toward unregulated channels, which could undermine national security and the soundness of the financial system.
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