By Maya Jackson Randall
WASHINGTON--Banks are asking a federal watchdog for more time to
comply with a rule designed to protect consumers who send money
abroad from excessive fees.
In a letter to Consumer Financial Protection Bureau Director
Richard Cordray Wednesday, banking groups said they need an extra
year to comply with key elements.
With the rule set to take effect in a few months, banks are
working to track down data on foreign taxes and overhaul their
systems in order to provide consumers the required information on
fees and exchange rates.
"There will be significant negative consequences for consumers"
if banks aren't granted an extension, wrote the Clearing House
Association, American Bankers Association, Consumer Bankers
Association, Independent Community Bankers of America and
NACHA--The Electronic Payments Association.
If banks are forced to comply by Feb. 7, 2013, consumers' access
to wire-transfer services will be restricted "and they will no
longer be able to reach all the people and places they can reach
today," the associations added.
Mr. Cordray this week acknowledged the fee disclosures "are
proving to be a difficult requirement" and said the agency will
consider ways to help. But one of his staffers said the bureau does
not plan to delay the effective date. The CFPB hosted a webinar
Tuesday to answer the industry's compliance questions.
The world's 215 million international migrants transferred about
$372 billion to developing countries in 2011, up from $332 billion
in 2010, says the World Bank
While some banks have grown more interested in tapping into this
consumer market, banks' activity pales in comparison with that of
Western Union Co. (WU) and MoneyGram International Inc. (MGI),
which respectively handled $73.2 billion and $15.3 billion in cash
transfers last year, according to Aite Group. Wells Fargo & Co.
(WFC), a leading banks in the market, remitted more than $1.8
billion in 2011.
Write to Maya Jackson Randall at
Maya.Jackson-Randall@dowjones.com
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