Western Union 2015 Annual Report Download - page 140

38
Our fees, profit margins and/or foreign exchange spreads may be reduced or limited because of regulatory initiatives and
changes in laws and regulations or their interpretation and industry practices and standards that are either industry wide or
specifically targeted at our Company.
The evolving regulatory environment, including increased fees or taxes, regulatory initiatives, and changes in laws and
regulations or their interpretation, industry practices and standards imposed by state, federal or foreign governments and
expectations regarding our compliance efforts, is impacting the manner in which we operate our business, may change the
competitive landscape and is expected to continue to adversely affect our financial results. New and proposed legislation relating
to financial services providers and consumer protection in various jurisdictions around the world has and may continue to affect
the manner in which we provide our services, see risk factor "The Dodd-Frank Act, as well as the regulations required by that
Act and the actions of the Consumer Financial Protection Bureau and similar legislation and regulations enacted by other
government authorities, could adversely affect us and the scope of our activities, and could adversely affect our financial
condition, results of operations, and cash flows." 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 has
subjected and may continue to subject us to additional regulatory oversight, mandate additional consumer disclosures and
remedies, including refunds to 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, results of operations, and cash flows 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 has been affected and is currently being affected by on-going changes to our compliance procedures
related to our settlement agreement 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 have changed
our compliance related practices and business model along the United States and Mexico border, including in the southwestern
region of the United States. Such changes have had, and will likely continue to have an adverse effect on our revenue, profit
margins, and business operations related to our United States to Mexico and United States to Latin America and the Caribbean
corridors.
In addition, one state and one United States territory have passed laws imposing a fee on certain money transfer transactions,
and certain other states have proposed similar legislation. Several foreign countries have enacted or proposed rules imposing
taxes or fees on certain money transfer transactions, as well. Although money transfer services themselves are not generally
subject to sales tax 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 have invoked and could continue to invoke the imposition of sales, service or similar taxes
on money transfer services. 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. Such
initiatives may have an adverse impact on our business, financial condition, results of operations, and cash flows.
Regulators around the world 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. 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, results of operations, and cash flows.
201 FORM 10-K
5