Venting frustration and looking for solutions, hundreds of workers from overseas, mainly from Jamaica, packed into the town hall in George Town on Tuesday night, looking for solutions to the problem of sending cash home.
Standing in the midst of a packed room, one man said, “People are waiting. People are hungry.” Some in the crowd told of families back home waiting on money for school tuition and other financial support.
Hundreds crowded into the town hall and hundreds more stood just outside the door and windows to hear what representatives from government, money transfer companies and the Jamaican Consulate had to say about the problematic situation with cash transfers and the shortage of U.S. cash.
“We are trying to find a workable solution,” Financial Services Councilor Roy McTaggart said. “We are not there yet.”
Since late August, there remains no solution to the problems that have plagued the money transfer companies, banks, government and the families who rely on cash transfers. Cayman National Bank, the last bank in the country working with the cash transfers, pulled out of the business on Aug. 26 and left MoneyGram, JN Money Services and the others without a bank on the island.
Without a bank, JN and the others restricted cash transfers to U.S. cash only so they can ship the money directly to the U.S. without having to convert Cayman dollars to U.S. currency, but the banks were caught off-guard by the currency switch. Banks saw demand for U.S. currency jump overnight and, according to Financial Services Minister Wayne Panton, the shortage of U.S. dollars was “almost immediate.”
“This has created a significant disruption,” Mr. McTaggart said.
The cash shortage has led many banks, including Butterfield and RBC, to give U.S. currency only to account holders. Other banks, like CIBC FirstCaribbean, now charge people without accounts a CI$50 fee to exchange a maximum of US$500. Those fees, plus the roughly 9 percent fee for the transfer means it can cost more than US$100 to transfer US$500 to family overseas.
“I cannot afford $46 to send $100 to Miami,” Susan Young said, addressing the panel and representing the frustrations felt by many in the crowd.
Carl Brown, who moderated the meeting, said of Jamaicans in Cayman sending money home, “Over 90 percent are blue collar workers and send $350 or less.” The new exchange fees cut into that money people are able to send home; most people in the town hall crowd did not have bank accounts.
Bankers’ Association silent on fees
Cayman and Jamaican officials criticized the Cayman Islands Bankers’ Association for not attending the meeting. Honorary Vice Consul for Jamaica Elaine Harris said the association had agreed to send a representative, but then canceled on the day and said they would issue a statement instead.
“It’s a missed opportunity,” for the banks to explain the fees, she said.
Premier Alden McLaughlin, speaking at the Chamber of Commerce legislative luncheon the following day, also addressed the U.S. cash shortage issue in his speech. He said, “Yesterday, the Bankers’ Association confirmed to the Ministry of Financial Services that the retail banks are now importing sufficient U.S. cash to meet increased local demand and the U.S. cash prices should ease shortly.” He added that the issue was “seriously damaging to our economy and we have to find a way to resolve it.” The consular officials had not seen the statement, issued by the Financial Services Ministry, which was sent to a limited number of media representatives a few hours before the meeting by the Financial Services Ministry.
The statement, which provided no new information from the association, noted: “CIBA President Mark McIntyre acknowledged that the banks’ adjustments, in relation to the [money services businesses’] decision to only accept U.S. cash, caused some initial disruptions.”
It quoted Mr. McIntyre as saying “However, now that the banks have made adjustments to their practices, those disruptions largely have been resolved.”
Jamaican Honorary Consul Joseph Marzouca, speaking at the meeting, said, “We need to send the money to Jamaica. Full stop.”
Clearly unhappy that the Bankers’ Association and the Cayman Islands Monetary Authority did not attend to help people understand what is going on, Mr. Marzouca said, “When CIMA and the Cayman Islands Bankers’ Association have time in the next week or two, we will bring them to you.”
Mr. McTaggart, councilor in the Financial Services Ministry, said, “I wish we had the bankers here tonight.”
More than US$110 million last year flowed to Jamaica from cash transfer companies in Cayman, the bulk of the US$180 million in remittances sent overseas in 2014. If remittances continued at that level, they would account for US$15 million in cash transfers each month.