Reps. García and Beatty Lead Call for IMF Surcharge Reform

WASHINGTON, DC — Reps. Jesús “Chuy” García (IL-04) and Joyce Beatty (OH-03), Ranking Member of the House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions, led 11 Members of Congress in a letter urging Treasury Secretary Janet Yellen to use the United States’ voice and vote at the International Monetary Fund (IMF) to push for the elimination of harmful IMF surcharges that burden debt-stricken countries.

Surcharges are extra fees imposed by the IMF on top of regular interest and service charges when a country’s debt exceeds a certain IMF threshold. These fees significantly increase the cost of borrowing, can undermine debt reduction efforts, and may divert public resources from critical areas like health, education, and climate adaptation. Later this month, the IMF Board of Governors will meet to vote on a series of reforms, including changes to the surcharge policy.

The Members wrote:

“The IMF has not offered evidence that surcharges are effective in their goal of disincentivizing reliance on the Fund. In fact, surcharges significantly increase countries’ debt burdens, and the Fund’s own analyses demonstrate that the likelihood of timely repayment and sustainable financing tend to decrease as debt burdens rise. Moreover, IMF lending already comes with great political and economic costs.

“We acknowledge that Treasury’s approach to surcharge reform endeavors to find a balance between alleviating countries’ debt burdens and maintaining IMF reserves. However, in our estimation, elimination of surcharge fees would not unduly harm the Fund’s balance sheets. The IMF’s precautionary balances target was recently met and will continue to grow above targeted levels even in the absence of surcharges.”

Reps. García and Beatty were joined by Reps. Sean Casten (IL-06), Emanuel Cleaver (MO-05), Rosa DeLauro (CT-03), Bill Foster (IL-11), Al Green (TX-09), Marcy Kaptur (OH-09), Brittany Pettersen (CO-07), Juan Vargas (CA-52), Nydia Velázquez (NY-07), Susan Wild (PA-07), and Nikema Williams (GA-05).

To see the full letter, click HERE.