White House to Impose 2 Percent Remittance Fee on Outbound Wire Transfers Starting Jan. 6

Planned Fee Structure and Implementation Timeline

The Trump administration plans to impose a 2 percent fee on outbound remittances exceeding $500 to Mexico, Guatemala, Honduras, and El Salvador starting Jan. 6, according to two Labor Department economists familiar with the rulemaking. The fee, which would be collected at the point of transfer through licensed money services businesses, is expected to raise roughly $3.2 billion in its first full year and would be directed to a newly created border security trust fund, the officials said.

A draft rule circulating at the Department of Homeland Security and the Treasury Department would require Western Union, MoneyGram, Walmart2World, Ria, and Intermex to withhold the fee at the time of transaction and remit the proceeds weekly to the Treasury, according to a trade association official who reviewed an internal summary of the proposal. The official said the rule is scheduled to be published in the Federal Register on Jan. 3, with compliance required by 12:01 a.m. Eastern on Jan. 6.

The fee would apply to both cash and electronic transfers sent to individuals in the four target countries. Transfers under $500 would be exempt. Transactions routed through correspondent banks, informal hawala networks, or cryptocurrency exchanges not registered as money services businesses would not be covered under the initial rule, the Labor Department economists said. The officials said the $500 threshold was chosen after an interagency review concluded that roughly 73 percent of all remittance volume to the four countries exceeds that amount.

A small-business owner in the sector who operates nine check-cashing and remittance storefronts in South Texas said his company received informal guidance from a regional Treasury compliance officer on Dec. 29. The owner, who spoke on condition of anonymity because his company has not yet received formal written notice, said the compliance officer indicated the administration would treat the fee as a special assessment rather than a tax, which would allow it to bypass the congressional appropriations process. The owner said his locations in McAllen, Laredo, and Brownsville handle roughly $1.8 million in remittances each month.

Industry Pushback and Legal Preparations

The trade association official said member firms plan to file a lawsuit in the U.S. District Court for the Northern District of Texas within 72 hours of the rule's publication, arguing that the fee exceeds the administration's authority under the Bank Secrecy Act. The official said the lawsuit would seek a temporary restraining order before the Jan. 6 effective date and would name Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem as defendants. The complaint is expected to cite the 2012 CFPB remittance rule and the Administrative Procedure Act.

The rule would mark the most significant change to remittance regulation since the 2012 Consumer Financial Protection Bureau disclosure rules took effect. Mexico received roughly $66 billion in remittances from the United States in 2024, according to Banco de Mexico data, with Guatemala, Honduras, and El Salvador receiving a combined $32 billion. The four countries account for approximately 58 percent of all outbound remittances from the United States, the trade association official said.

The small-business owner said software vendors including ServiCentro and Viamericas had begun sending upgrade notices to storefront operators on Dec. 30, warning that point-of-sale terminals would need firmware updates to calculate and record the fee separately from state money-transmitter fees. The owner said the upgrades would cost his nine locations roughly $14,000 in total, not including staff training time. He said tellers would be required to collect Social Security numbers or Individual Taxpayer Identification Numbers from senders for any transaction subject to the fee, adding roughly 90 seconds to each transaction.

Economic and Political Stakes

The administration's internal economic analysis, which the Labor Department economists reviewed, projects that the fee would reduce outbound remittances to the four countries by 4 to 7 percent in the first six months, with migrants shifting some volume to informal channels or prepaid debit cards. The analysis also estimates that roughly 22 million U.S. households send money to the four countries at least once per quarter. One of the economists said the analysis assumes a price elasticity of demand of negative 0.35, meaning that a 2 percent fee would produce a roughly 0.7 percent reduction in formal transfers.

The border security trust fund would be administered by DHS and would be designated for physical barrier construction, detention bed space, and technology upgrades at ports of entry, the officials said. Congress would not need to appropriate the money before DHS spends it because the fund would be financed by the special assessment rather than general revenues. The Labor Department economists said the administration expects the fund to reach $2.8 billion by the end of fiscal 2026, with the remainder covering collection costs and refunds for canceled transactions.

What happens next depends on whether the Federal Register publication occurs on schedule. The Labor Department economists said the final sign-off from the Office of Management and Budget occurred on Dec. 30, clearing the way for publication. The small-business owner said his storefronts had already begun testing software updates and training tellers to explain the fee to customers. In the next 48 to 72 hours, watch for the formal Federal Register notice, for statements from the Mexican Secretariat of Finance, and for any guidance from FinCEN clarifying how cryptocurrency and prepaid card transactions will be treated under the new framework.