The United States is home to more immigrants than any other country in the world. Census estimated that 41 million foreign-born individuals resided in the United States from 2010 through 2014, making up 13 percent of the population. According to the World Bank, the United States is also, by far, the largest source of remittances from foreign-born residents to their home countries, including Mexico, China, India, and the Philippines, among others (see fig. 1). Remittance funds can be used for basic consumption, housing, education, and small business formation and can promote financial development in cash-based economies. In a number of developing economies, remittances have become an important and stable source of funds that exceeds revenues from exports of goods and services and financial inflows from foreign direct investment. Remittances can be sent through formal transfer systems and informal methods. Formal systems typically include banks, credit unions, money transfer businesses such as wire services, and postal services. In the United States, providers of remittance transfer services (including bank and nonbank institutions) are subject to federal oversight and, depending on the state in which they operate, can be subject to supervision by states. According to CFPB, nonbank remittance transfer providers sent an estimated 150 million individual transfers from the United States in 2012. Informal remittance transfer methods include hand-carried cash, courier services, and agents known as hawalas. Individuals can transfer remittance funds in several ways, such as 1. cash payments to individuals and bank accounts; 2. prepaid debit or credit cards; and 3. online and through mobile devices. Global remittance estimates are published annually by some international organizations on an annual basis. IMF collects data on components of remittances submitted by its member countries, including the United States, as part of its annual publication of balance of payments statistics. IMF’s Balance of Payments and International Investment Position Manual provides a framework for identifying individual remittance flows that benefit households. According to IMF, this framework can be applied by all countries and should lead to some level of comparability among them. The World Bank uses IMF statistics to produce an annual Migration and Remittances Factbook and monthly and annual remittances data on its website. Other international organizations, such as the IDB through the Multilateral Investment Fund, also produce annual reports on remittance estimates. In the United States, BEA is responsible for compiling the official U.S. estimates. Other nations may delegate the official estimation of remittances to central banks or specific government agencies. In response to requests from policymakers, remittance data compilers, and other data users, IMF and the World Bank published a guide for compilers and users of remittances data. The purpose of the guide is to promote lasting improvements in remittances data, which it seeks to accomplish by summarizing the definitions and concepts related to the balance of payments framework and by providing practical compilation guidance. Two items in the guide that substantially relate to remittances are “personal transfers” and “compensation of employees,” both of which countries are required to report to IMF. Personal transfers are a measure of all transfers in cash or in kind made or received by resident households to or from nonresident individuals and households. Compensation of employees is a measure of the income of short-term workers in an economy where they are not resident and of the income of resident workers who are employed by a nonresident entity. The guide also defines additional measures related to remittances, which countries are encouraged but not required to report. For example, personal remittances represent the sum of personal transfers, net compensation of employees, and capital transfers between households, according to the guide. Institutions use different methodologies to produce estimates of remittances. For example, BEA uses demographic and household survey data and a model that calculates the remittance rates by demographic group to create the official estimate of remittances from the United States. The World Bank has developed its own methodology to create remittance estimates. Its research group produces country-specific development indicators and international development statistics. The World Bank then complements these data with information from the IMF’s Balance of Payments and International Investment Position Manual to create annual and semi-annual remittance estimates. Since 2010, researchers at the World Bank have also used United Nations population data to develop a bilateral migration matrix, which provides a second set of country-specific bilateral remittance estimates— that is, estimates between sending and receiving countries. These estimates are based on the number of migrants in different destination countries and estimates of how changes in the income of migrants influence the remittances they send. IDB’s Multilateral Investment Fund has a different methodology, using estimates reported by central banks to IMF as a baseline for individual country estimates. The Multilateral Investment Fund then works with the Center for Latin American Monetary Studies to help refine remittance estimates for selected countries in the Latin America and Caribbean region. Finally, some central banks use a combination of methods to estimate remittances. The central bank of Mexico, known as Banco de México, tracks remittance flows to Mexico with the help of regulatory reporting requirements on money transmitters. Since 2003, Mexico’s methodology for estimating remittances has required firms that receive remittances to report, on a monthly basis, the amount of money received and the number of transactions conducted between the United States and Mexico. To track remittances through informal channels, such as couriers that fall outside this regulatory framework, Banco de México conducts a survey at the U.S.-Mexico border of Mexicans entering the country. The central bank of the Philippines, known as Bangko Sentral Ng Pilipinas, estimates remittances that are channeled through banks. The Philippine government also has established a formal program for registering and tracking overseas Filipino workers. This program provides data to the government on the type of employment these workers obtain as well as their salaries. The Bangko Sentral Ng Pilipinas also uses the Survey of Overseas Filipinos to supplement data from the program. Using these two approaches, Bangko Sentral Ng Pilipinas is able to identify remittance funds sent by Filipinos overseas through friends and relatives and amounts brought in when these workers return home. A proposed fine on immigrants unable to show proof of legal status who send money through remittance transfer providers covered under EFTA could raise money for border protection, but the potential amount of revenue to be generated is unknown. Net revenue from the fine—the total of all fines collected less CFPB’s administrative and enforcement costs— would depend on several key factors, namely the dollar amount of remittances sent by those without legal immigration status, changes in remitter behavior because of the fine, including a potential reduction in remittances through regulated providers, and the cost of enforcement. For example, the ability to raise money depends on a significant number of individuals without legal status using regulated remittance transfer providers and paying the fine. However, a fine could result in a decrease in remittances in the regulated market and an increase in remittances through informal methods of money transfer. The revenue raised by the proposed fine would first be used to pay CFPB for enforcement costs. We did not identify any estimates of the administrative and enforcement costs associated with the fine. Our hypothetical scenario analysis illustrates the sensitivity of potential net revenue estimates to these factors. CFPB and other federal regulators would enforce the requirements of the proposed legislation and CFPB identified some implementation challenges. Lastly, providers told us the fine could have consequences for them, and one provider said that smaller providers would likely be affected the most. A fine could potentially generate net revenue for border control, but the following selected factors would influence the actual amount: The dollar amount of remittances sent by those without legal immigration status. The revenue raised by the fine would depend on the dollar amount of remittances sent by those individuals in the United States without legal immigration status and, specifically by those using regulated remittance transfer providers. According to three studies we identified during discussions with experts, estimates of unauthorized U.S. immigrants in 2012 ranged from 11.1 million to 11.4 million people. Of that number, only those who conduct transactions through providers that are subject to EFTA would actually pay a fine, should they continue to use such providers, and that number is unknown. The response to the fine by individuals in the United States without legal status, including a reduction in remittances through regulated providers. If individuals without legal status respond to the fine by making money transfers that may not be subject to EFTA requirements, by remitting less, or leveraging connections with immigrants with legal status, the amount of revenue raised by the fine would be lower. Representatives from almost all of the organizations we spoke with, including providers, researchers, federal agencies, and community groups, stated that remitters without legal status may be deterred by the fine and the additional scrutiny around their immigration status. The amount of revenue generated by the fine would also depend on the extent to which those without legal immigration status continue to use regulated systems after the fine is imposed instead of switching to informal methods, such as hawalas. Two articles identified in our literature search noted that those without legal status may use methods that allow them to maintain a higher degree of anonymity. For example, those without legal immigration status may have relatives or friends who are authorized to be in the United States send remittances for them, potentially lowering the amount of revenue raised by a fine. Conversely, if most remitters continue to remit the same amount, and continue to remit through regulated channels, the total amount remitted may remain stable, and more revenue will be raised.