The American Fintech Council (AFC) has expressed significant concerns regarding a proposed remittance tax in the budget reconciliation bill. The AFC, which represents fintech companies and innovative banks, sent a letter to congressional leaders urging them to reconsider the tax. The letter was addressed to Senate Finance Committee Chairman Mike Crapo (R-ID), House Ways and Means Committee Chairman Jason Smith (R-MO), and Ranking Members Ron Wyden (D-OR) and Richard Neal (D-MA).
Phil Goldfeder, CEO of the AFC, stated that "this tax would put pressure on grocers, pharmacies, and other small businesses that provide remittance services, threatening to raise costs for consumers well beyond those who send money abroad." He emphasized the need for Congress to collaborate with financial innovators, regulators, and consumer advocates to modernize payment systems.
The AFC highlighted that the proposed tax conflicts with state-level efforts to streamline remittance regulations. More than 25 states have adopted the Conference of State Bank Supervisors’ Money Transmission Modernization Act (MTMA), which AFC supports as a model for effective oversight. The council also warned that such taxes could drive consumers towards riskier options that undermine anti-money laundering efforts.
Ian P. Moloney, AFC’s Senior Vice President and Head of Policy and Regulatory Affairs, noted that "taxing remittances is not just bad policy – it’s counterproductive." He pointed out that state-level experiences show these taxes push consumers into informal channels, complicating anti-money laundering efforts.
The AFC cited a 2016 U.S. Government Accountability Office report indicating that similar taxes reduced legal remittance volumes while increasing unregulated transactions. They cautioned against layering federal taxes on top of state regulations due to potential compliance cost increases for providers.
As an organization focused on promoting transparent financial systems through responsible innovation, the AFC continues its advocacy against measures they believe could harm consumers and small businesses while creating regulatory uncertainty.