Western Union Shareholder Resolution 2009

Community Reinvestment Policy

WHEREAS: Western Union serves many of the financial needs of immigrant populations, with a major presence in poor and racially diverse neighborhoods (Urban Institute, 2004);  

Western Union's customers are mostly urban and poor. The typical user of its remittance services is a low-wage immigrant worker who lives in an American city, makes $15,600 annually and sends home $293 a month, almost 30% of his or her net monthly income. (Center for Financial Services Innovation, October 2006.) These remitters spend up to $300 a year on costly transaction fees and disadvantageous exchange rates, which equals one week's salary for the remitter or at least sixty days' salary for their kin in cities such as San Salvador, Mexico City, and Manila (Transnational Institute for Grassroots Research and Action, April, 2007);

The federal law known as the Community Reinvestment Act (CRA) obligates federally insured banks and depository institutions to help meet the needs of communities in which they operate. While no such law exists for money transfer agencies like Western Union, Federal Reserve Chairman Ben Bernanke has stated that "the CRA reaffirmed the long-standing principle that financial institutions must serve the convenience and needs...of the communities in which they are chartered;"

Community-based organizations across the country are pursuing legislation which would require money transfer businesses, check cashing services and payday loan outlets to disclose their reinvestment practices in neighborhoods in which they do business;

Western Union currently participates in virtually no community reinvestment, defined as partnering with community-controlled, remitter-serving organizations to build social capital and identify community needs in order to develop long-term programs that reflect those needs.   Their current philanthropic practices are limited to foundation grants, the majority of which do not go to the states where Western Union makes the majority of its U.S. profit.   A study conducted by the Transnational Institute for Grassroots Research and Action (TIGRA) in 2006 found that 46% of Western Union's U.S. remittances sent to Latin America came from California, Illinois, Florida, and New Jersey, while under 16% of its grants went to those states.   In contrast, only 1.4% of U.S. remittances to Latin America came from Colorado, while over 43% of Western Union's grants went to that state;  

Western Union has faced numerous lawsuits based on predatory fees and unfair exchange rates.   These suits have resulted in millions of shareholder dollars being spent on settlements.   These practices, along with our Company's relatively low degree of community reinvestment, increase the risk our Company faces in the competitive consumer market which may further affect shareholder value;

RESOLVED: shareholders request that the Company issue a report to shareholders by December 1, 2009, at reasonable cost and excluding confidential information,   on the company's policies on investment in the communities in which it does business, separate from and beyond any philanthropic or charitable efforts, with a view to incorporating criteria to work with local stakeholders and organizations to identify community needs, and to develop long-term reinvestment that reflects those needs.