Calls on Congress to reject measure that would harm consumers and small businesses while creating regulatory uncertainty

Washington, D.C. (May 27, 2025) – The American Fintech Council (AFC), the premier industry association representing responsible fintech companies and innovative banks, sent a letter today to congressional leaders expressing strong concern over the proposed remittance tax included in the pending budget reconciliation bill. The letter, addressed to Senate Finance Committee Chairman Mike Crapo (R-ID) and House Ways and Means Committee Chairman Jason Smith (R-MO), as well as Ranking Members Ron Wyden (D-OR) and Richard Neal (D-MA), urges Congress to reconsider a blanket tax on cross-border payments that would harm small businesses and everyday consumers while empowering bad actors and undermining effective anti-money laundering enforcement. In addition to its own objections, AFC is coordinating with other concerned industry associations on a joint industry response to the remittance tax proposal.

“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,” said Phil Goldfeder, CEO of the American Fintech Council. “Rather than imposing new burdens, Congress should work with responsible financial innovators, regulators, and consumer advocates to modernize payment systems in ways that are fair, efficient, and inclusive.”

In addition to raising costs for consumers and small businesses, AFC emphasized that the proposed tax conflicts with ongoing state-level efforts to streamline and modernize remittance regulations, particularly the widespread adoption of the Conference of State Bank Supervisors’ Money Transmission Modernization Act (MTMA). To date, more than 25 states have enacted the MTMA, which AFC supports as a model for effective and coordinated oversight. The letter also notes that remittance taxes have been shown to drive consumers to riskier options that undermine efforts to stop money laundering – empowering criminal actors and making it harder for law enforcement and the national security community to control illicit finance.

“Taxing remittances is not just bad policy – it’s counterproductive,” said Ian P. Moloney, AFC’s Senior Vice President and Head of Policy and Regulatory Affairs. “Experience at the state level shows these taxes drive consumers into informal, unregulated channels, threatening anti-money laundering efforts and consumer protections. Congress should build on the regulatory progress already underway, not reverse it.”

AFC points to evidence from a 2016 U.S. Government Accountability Office report showing that remittance taxes, such as one enacted in Oklahoma, significantly reduced legal remittance volumes while driving more transactions into unregulated alternatives. AFC also warns that layering federal taxes on top of state regulations would raise compliance costs for remittance providers, leading to higher fees for consumers or fewer options in the market.

A standards-based organization, AFC is the premier trade association representing the largest financial technology (Fintech) companies and innovative banks offering embedded finance solutions. AFC’s mission is to promote a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy. AFC members foster competition in consumer finance and pioneer products to better serve underserved consumer segments and geographies.

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