The next frontier for economic justice: with remittances to Mexico becoming a big business, immigrants begin to take a hard look at the companies that profit.

"Who here is rich?" asks Francis Calpotura, looking out at a dozen shivering Mexican immigrants seated in the basement of Saint Agatha's Catholic Church in Sunset Park, Brooklyn. Men and women, still wearing winter jackets due to a malfunctioning heating system, look at each other and smile, slightly confused by the stranger's question.

"Who here has so much money that they just want to throw it away?" More smiles, a few laughs. Still no hands.

"Okay, well ... who here works hard?" This was more familiar territory; all hands go up. "And who here sends money home to family in Mexico?" All hands again go up. People break into small groups and discuss how much money they have sent home the previous year. Together they discover that the amount comes to nearly $65,000. People report spending 4-9 percent on fees to send the money, or about $5,000; most say that they use Delgado Travel or Vigo, two money-transfer companies with numerous storefronts throughout the city. Then, factoring in the currency exchange rate, Calpotura tacks on another few percentage points to the costs, ending up with an estimated $8,000 in total transaction fees.

"How much do you think it costs these companies each time they send your money?" Calpotura asks the group.

"Maybe five dollars?" suggests a heavy-set woman. Another guesses around 6 percent of the amount being sent.

"No, both of those are way too high," replies Calpotura. "Companies pay only 67 cents for each transaction." On a few faces, looks of curiosity harden.

"So, what do you think would be a fair price?" The room becomes quiet.

A young man wearing a brown jacket, who introduces himself as Candelario, eventually breaks the silence. "They should charge us 50 cents," he says, smiling. People erupt into laughter, enjoying the prospect of Mexicans undercutting the profits of the money-transfer companies.

Calpotura has another question. "Who here can think of ways to spend $8,000 in their hometowns?" No one has a problem coming up with potential projects: potable water, health clinics, new schools.

Eventually, a woman with a baby in her arms speaks up. "So, what's the solution?" she asks earnestly. "I don't mean to be impatient, but I have to leave in 5 minutes to pick up one of my children, and I want to know what we can do."

"Well, it's not going to be easy, because right now our group is small," says Calpotura. "But just in this little group we send $65,000 back to Mexico. Imagine if you could get 300 people to a meeting with the money-transfer companies, then you could say that you represent about $1 million, and I bet they would listen to your demands. Whether you want them to lower the fees or to put money back into projects here or in Mexico, you wouldn't be easy to ignore."

An hour later, at the conclusion of the meeting, Candelario was smiling as he pushed open the basement door and headed into the bustle of Brooklyn's Fifth Avenue. He was still an "unskilled" laborer, with no bank account or line of credit to his name. But now, he was also something new, something just a bit exhilarating. He was an economic force to be reckoned with.

Remittances from the Bottom up

The February meeting was organized by the Union de la Comunidad Latina, an immigrant organizing project of the Fifth Avenue Committee (FAC), a Brooklyn-based community development corporation. Calpotura, their guest facilitator, had recently returned from conducting a series of workshops on the topic of remittances at the World Social Forum in Brazil. After spending many years at the Center for Third World Organizing, in 2004 he founded the Transnational Institute for Grassroots Research and Action (TIGRA) and has been conducting research on the remittance industry, hoping to encourage and link up local organizing campaigns.

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For Calpotura, the fight is personal. His mother set out from the Philippines in 1974, finding work as a nurse's aid in San Francisco; each month she would wire money back to her husband and children in Manila. When he was 15, Calpotura joined his mother in the United States, but the tangible benefits from the remittances she sent--a family feast, a new pair of shoes, a repaired car--have never been forgotten.

Though a casual observer might have missed it, the meeting of the Union de la Comunidad Latina had an ambitious goal: to engage--and hopefully organize--immigrants at the grassroots level around the issue of remittances, using the common experience of sending money home as a way to talk about migration, exploitation and now restitution in the form of reinvestment. Thus far, the conversation around remittances has been a credentialed, invitation-only affair, dominated by the usual clique of academic and government specialists, who debate best practices and publish numerous reports. There has been little movement towards encouraging the senders themselves to play an active role in the debate or viewing remittances within an economic justice context.

"First and foremost, we are interested in organizing," explains Artemio Guerra, the director of organizing and advocacy at FAC. "You've got to engage the people being affected by the issue. These people aren't in the government, and they certainly aren't connected to any powerful institutions. They are the immigrant workers themselves, whose voices haven't been heard."

The latent power of senders excites Guerra. "We don't have to pretend that we have some sort of abstract power. Workers are the reason for the remittance industry, and if we can get them together, they have the ability to use their force to hold money-transfer companies accountable. The potential is there."

Indeed, the amount of money sent home by immigrants in the U.S. to Mexico is staggering. In 2004, $16.6 billion was remitted, according to the Bank of Mexico. This was up 24 percent from the $13.3 billion sent home in 2003, and almost twice the $9.2 billion sent in 2001. With around 51 million transactions last year, at an average value of $327, remittances have now become the second largest source of income for the country, after oil. In 2005, analysts predict that the amount remitted will continue to grow to an estimated $20 billion.

Enter the Patriot Act 

The passage of the USA Patriot Act in October 2001 complicated the always-influx remittance industry. Amid concerns about money-laundering schemes and possible terrorist financing, the Patriot Act increased the reporting and scrutiny requirements of banks, while also expanding the anti-money laundering requirements to all money service businesses, like money-transfer companies and check-cashing stores. In short, banks were told to do more to make sure that their clients were engaged in legitimate, non-terrorist related activity, and money-transfer companies had to comply with anti-money-laundering requirements.

One result, as reported in March 2004 by the New York Times, was that banks simply began to close their commercial accounts with money-transfer companies rather than deal with the Patriot Act requirements. Roughly 20 money-transfer businesses received letters from JPMorgan Chase and North Fork Bank telling them that their accounts would be shut down at the end of March. In response, the Financial Crimes Enforcement Network (FinCEN), an agency within the Department of Treasury, has since issued detailed guidelines aimed at convincing banks to continue to work with money-transfer companies; a spokeswoman for FinCEN says it is too early to discern whether this effort has had any effect.

David Landsman, the executive director of the National Money Transmitters Association--a trade group that counts among its membership 42 money-transfer companies--predicts that many will go out of business due to "epidemic denial of banking services to licensed money transmitters." Some businesses have even begun to hire their own armored-car services in order to transfer their money, unable to find a willing bank to hold their funds. In a recent survey of his members, Landsman found that about 90 percent were currently unable to find new banks for their accounts. The situation is dire.

One of the money-transfer businesses dealing with this crisis is Delgado Travel, which received the letter from North Fork Bank telling them that their account would be closed. On the way to Delgado Travel's headquarters, during a sunny March afternoon, the sidewalks of Roosevelt Avenue in Queens are bustling with Latino day laborers still hoping to find someone in need of hired help. On the other side of the glass walls of Delgado Travel, it is as orderly and hushed as the street is chaotic and noisy. Business looks to be booming.

Jeanette Delgado-Savino, a youthful and energetic woman, is the vice president of Delgado Casa del Cambio. Her phone rings constantly; the search is on for a new bank. "Over the last 10 years or so, our customer base has shifted dramatically," Delgado-Savino says between calls. "Before, most of our business was with the Ecuadorian and Colombian community, but now Mexican immigrants are the largest group." As the influx of Mexican immigrants has continued, Delgado Travel has expanded their operations and now has 20 storefronts in New York City, as well as offices in Long Island, New Jersey and Chicago. What Delgado-Savino's Ecuadorian-born father, Hector Delgado, began three decades ago with shipments of money stuffed in suitcases carried by travelers has evolved into a sophisticated--and profitable--operation.

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When asked about the bank's motivations for refusing to deal with her company, Delgado-Savino brushes aside the Patriot Act explanation. "Banks want to eliminate the money remitters, because they want to take over the industry," she insists. "They talk about national security, but in reality they are doing this because it's a big business now. Citibank won't touch us. Chase won't touch us. They all want to put neighborhood companies like us out of business, so that they can move in."

Though banks are quick to refute charges of post-Patriot Act opportunism, they are, as Delgado-Savino and Landsman assert, increasingly anxious to attract the many immigrants without bank accounts as customers, with remittances being the primary draw. Yet for all their targeted marketing and recent slashing of fees to send money home--the most recent being Bank of America's announcement in September that they are making it free to send money to Mexico for account holders--banks have been largely unsuccessful in their attempts to move into the remittance field. According to Manuel Orozco, a Nicaraguan immigrant who has become the foremost analyst of remittances and a senior researcher at Georgetown University, only 3 percent of the money transferred to Mexico is done through banks. The industry is still dominated by large money-transfer companies like Western Union, Money Gram and Vigo.

And Orozco doesn't believe that banks will come to dominate the remittance market any time soon, predicting instead that they will forge partnerships with money-transfer companies that already have a solid track record. "Over the next five years, what you will see is increasing consolidation within the industry," he says of this development. (Indeed, in May 2005, First Data, the parent company of Western Union, announced that it was in the process of acquiring Vigo.) Though mergers nearly always harm the customer in the long run, in this case a consolidating remittance industry may make it easier for organizers to focus their resources on, say, a First Data--avoiding an ad hoc fight against local mom-and-pop stores in the mold of Delgado Travel. First Data could be the Wal-Mart of the remittance industry: big and bad, but also promising, since a victory would send shockwaves far and wide.

But what sort of victory? According to Orozco, "money-transfer companies can't go much lower" in terms of the fees they charge if they want to cover overhead (though this assertion seems questionable in the case of a financial behemoth like First Data, whose Western Union posted $1 billion profits in 2004). Yet fees to wire money to Mexico have already been cut in half since the late 1990s through increased competition, and with some banks preparing to erase entirely the costs of sending money for account holders, the future battle--if there is to be one--will most likely be over creating funding streams for community investment in Mexico or in Mexican immigrant communities in the U.S., like Sunset Park. In a sense, such a program would be following the guidelines of the Community Reinvestment Act, which mandates that banks--after their history of redlining--direct a portion of their profits into development projects that benefit the communities they serve. With more banks pursuing the untapped remittance market, and First Data looking to further dominate the money-transfer industry, a commitment to reinvest a percentage of the money remitted directly into Mexican projects could become a major selling point. But first, a constituency needs to be mobilized in order to begin pressing the case.

$1 Million Mobilized in Brooklyn

On a stuffy September evening, the multipurpose room of St. Agatha's church is beginning to fill up. After a summer of intensive neighborhood door-knocking, La Union has invited representatives of Vigo to the Mexican Independence-themed party to hear directly from immigrants about, among other things, the need to begin investing in community development projects.

Immigrants begin testifying to the crowd--which now includes two men from Vigo--about the importance of the money they send home. One of the members then reads the three demands, which have been written on a large sheet of paper: Respect; Affordable fees; Reinvestment in the community.

Salvatore Rizo, one of the Vigo representatives, says afterward in a phone interview that he sees a future partnership between his corporation and La Union. "We are thinking about a reciprocal arrangement, where they spread the word about us, and we make a donation to the organization each time one of their members comes in." That, of course, is not the eventual goal of remittance organizing: to be the doorknockers that bring in more money to a multinational corporation. But it is a beginning--immigrant customers have opened up a dialogue with a company that will in all likelihood soon become a member of the largest money remitter, First Data. Of course, to force concessions from First Data will take more than local fights; it will take coordination among many engaged immigrant communities, the vision Calpotura had when he founded TIGRA.

As immigrants in Sunset Park begin to file out of the building, they seem to embody the words of Hector Cordero-Guzman, the chair of the Black and Hispanic Studies department at Baruch College. "What you're looking at with remittances is a story of people with very modest means who are able to save and invest in their communities of origin," he said. "It is a story of collective action, of how modest resources, aggregated, can have important economic development benefits back home."

The immigrants gathered in the multipurpose room tonight--like immigrants across the country--have all invested in their communities of origin, whether through supporting local development projects or simply sending money home to care for aging relatives. Now, they seem to be saying, it's time for the people that have been snatching up portions of their earnings in the process to do some investing of their own. It remains to be seen what sort of coordinated campaign could be conducted on a national scale if four or five immigrant communities like Sunset Park linked up against a target like First Data with a specific demand to reinvest a portion of their profits. But if the organizing experiences in Brooklyn are any indicator, it might not be as far-fetched as it first seemed in that cold church basement, with only a handful of curious Mexicans sharing their experiences.

Gabriel Thompson is a Brooklyn-based writer currently working on a book about Mexican immigrants.