Economic Ramifications of Remittances-for-Border Wall Proposal

A US presidential candidate has proposed blocking workers from sending remittances to their families and canceling visas to force Mexico to build a wall along the shared border. Policy analysts quickly responded that a plan to block such money transfers would harm both economies and may violate laws. Aaron Klein, Brookings Institution fellow, in a report by Susanna Kim for ABC News, explained that the a US policy goal has been to encourage funds moving though official systems and discourage transfers through underground networks: “The Patriot Act and subsequent federal law governing remittances in the Dodd-Frank [Wall Street Reform and Consumer Protection Act] were never intended to be used to threaten to cut off the flow of migrant worker remittances for foreign policy aims.” Such transfers, typically small sums, could be transferred in other ways, including shared bank accounts or credit card accounts. Tracking remittances would be a costly administrative endeavor. Even discussing the possibility of blocking remittances reduces trust in the legal banking system. – YaleGlobal