FOREX NEW YORK COMPANIES

Both resent having to pay Western Union a $10 fee to send money abroad and an additional cut to convert dollars to pesos. But these charges have fueled the company's record profits and made it a relative outlier in the financial services industry. As billions of dollars in fee income have evaporated at the nation's largest banks because of regulations passed in the wake of the financial crisis, the money-transfer industry has escaped the crackdown.

Soon, however, the companies, which are largely regulated by states, will be subject to new federal rules. Starting in February, they will have to disclose more to customers about transfer fees and currency exchange rates. The rules, part of the Dodd-Frank financial regulation law, will also require companies to give customers up to 30 minutes after a transaction to get a full refund.

But consumer advocates are raising alarms that money-transfer companies face fewer restrictions because the rules do not touch the pricing of services.

"You still have a situation where customers are subjected to these predatory products with no cap on fees or exchange rates," said Oscar Chacon, the executive director of the National Alliance of Latin American and Caribbean Communities in Chicago.

Money-transfer companies say that they offer an invaluable service for customers who might not have access to traditional banks and who would otherwise have no way of transmitting money to their families.

"The money-transfer industry is very competitive, and consumers have a range of choices for sending money," said Tom Fitzgerald, a Western Union spokesman.

Western Union, which dominates the money-transfer market, notes that it already discloses the amount of money being submitted, the exchange rate and the amount that the recipient will receive. It also tells customers that "in addition to the transfer fee, Western Union also makes money when it changes your dollars into foreign currency."

Esparza, who sends money to his children in Mexico City, said that the $10 fee would not be onerous if he were sending a larger amount, but that it seemed exorbitant for $50.

Gonzalez said that even though $10 might not seem like a lot, "In Mexico, that money goes farther."

Aside from the transfer fees, Western Union and other similar services profit as they buy batches of currencies at a wholesale rate. The money-transfer companies do not disclose the spreads they benefit from when they set exchange rates.

"It's a big profit center for these companies, borne on the backs of the people who can least afford it," said Matthew Piers, a lawyer in Chicago, who successfully brought a lawsuit on behalf of Mexican immigrants against Western Union in 2000 that accused the company of misrepresenting exchange spreads.

Western Union did not admit or deny wrongdoing, but agreed to pay more than $400 million to settle the claims.

For Javaid Tariq, a taxi driver in New York City who sends money monthly to his family in Pakistan, the exchange rate is particularly infuriating because of how much money he loses. When he sent $300 to his family in April, he received 89.2 rupees for every dollar, less than the 91.2 exchange rate that he checks each morning, he said. For his family, that means 599 fewer rupees, or more than a week's salary in Lahore.

Frustrated, Tariq said, "They are taking this money from the people who can least afford it."

Analysts expect the market for money transfers to grow. The value of cross-border transfers is expected to reach $437 billion in 2012, up from $387 billion in 2009, according to the Aite Group, a research and advisory firm. In the United States, this is led partly by a growth in transfers to China and India and an influx of immigrants from western and eastern Africa, said Larry Berlin, an analyst with First Analysis in Chicago.

Western Union and rival companies are poised to profit. Western Union, with the largest share of the market at nearly 18 percent, recorded $4.2 billion in transaction fees last year, up 4 percent from 2010. The fees accounted for more than 75 percent of the company's total revenue last year.