Western Union 2011 Annual Report Download - page 40

well as the regulations required by that Act and the creation of the Consumer Financial Protection Bureau could
adversely affect us and the scope of our activities, and could adversely affect our operations, results of
operations and financial condition.” Recently proposed and enacted legislation related to financial services
providers and consumer protection in various jurisdictions around the world and at the federal and state level in
the United States may subject us to additional regulatory oversight, mandate additional consumer disclosures and
remedies, including refunds to consumers, mandate additional taxes or fees to be imposed upon consumers, or
otherwise impact the manner in which we provide our services. If governments implement new laws or
regulations that limit our right to set fees and/or foreign exchange spreads, then our business, financial condition
and results of operations could be adversely affected. In addition, changes in regulatory expectations,
interpretations or practices could increase the risk of regulatory enforcement actions, fines and penalties.
For example, our business is currently being affected by on-going changes to our compliance procedures
related to our agreement and settlement with the State of Arizona. See risk factor “Western Union is the subject
of governmental investigations and consent agreements with or enforcement actions by regulators.” Due to
regulatory initiatives, we will continue to evolve our business model and practices along the United States and
Mexico border, including in the southwestern region of the United States. Such changes will likely have an
adverse effect on our revenues, profits, and business operations.
In addition, one state has passed a law imposing a fee on certain money transfer transactions, and certain other
states have proposed similar legislation. At least two foreign countries have enacted rules imposing taxes or fees
on certain money transfer transactions, as well. Although money transfer services themselves are not generally
subject to sales tax on money transfer services elsewhere in the United States, the current budget shortfalls in
many jurisdictions, combined with continued federal inaction on comprehensive immigration reform, may lead
other states or localities to impose similar taxes or fees. Similar circumstances in foreign countries could invoke
similar consequences. A tax or fee exclusively on money transfer services like Western Union could put us at a
competitive disadvantage to other means of remittance which are not subject to the same taxes or fees.
Other examples of changes to our financial environment include the possibility of regulatory initiatives that
focus on lowering international remittance costs. For example, Pakistan subsidizes certain remittances into the
country from Pakistanis working abroad. We do not participate in this program, but remittance companies
accepting the subsidy are prohibited from charging fees to the sender or receiver. Such initiatives may have an
adverse impact on our business, financial condition and results of operations.
Regulators around the world increasingly look at each other’s approaches to the regulation of the payments
and other industries. Consequently, a development in any one country, state or region may influence regulatory
approaches in other countries, states or regions. This includes the interpretation of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (the “Act”). Similarly, new laws and regulations in a country, state or
region involving one service may cause lawmakers there to extend the regulations to another service. As a result,
the risks created by any one new law or regulation are magnified by the potential they have to be replicated,
affecting our business in another place or involving another service. Conversely, if widely varying regulations
come into existence worldwide, we may have difficulty adjusting our services, fees and other important aspects
of our business, with the same effect. Either of these eventualities could materially and adversely affect our
business, financial condition and results of operations.
Our agents’ or subagents’ failure to comply with federal and laws and regulations as well as laws and
regulations outside the United States could have an adverse effect on our business, financial condition and
results of operations.
Any determination that our agents or subagents have violated laws and regulations could seriously damage our
reputation and brands, resulting in diminished revenue and profit and increased operating costs. In some cases,
we could be liable for the failure of our agents or subagents to comply with laws which also could have an
adverse effect on our business, financial condition and results of operations.
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