Trades Join With Bankers in Urging Changes on Remittances
CUNA and NAFCU have joined with the two largest banking trade associations in urging lawmakers to narrow the definition of remittance transfers so that those financial institutions won't be forced out of the international electronic fund transfer business.
In a letter to Senate Banking Committee Chairman Christopher Dodd (D-Conn.) and Committee Member Daniel Akaka (D-Hawaii), the groups wrote that the regulatory overhaul bill that the Senate is likely to take up next week would classify certain transfer services as remittance services and make institutions that provide them liable for disclosing all costs up front. According to the letter, which was sent by the American Bankers Association, CUNA, the Independent Community Bankers of America and NAFCU, because the financial institutions don't control the entire transaction process, they may not know the total transaction costs at the time the member or customer initiates the transaction.
The bill aims to increase disclosure requirements for financial institutions and other providers of wire transfer and remittance services.
But the trade groups said while the provisions may be aimed at protecting consumers, they could drive banks and credit unions out of the funds transfer business and have the unintended effect of "depriving consumers of a competitive market."