Fed: Our International ACH Service Solves CU Remittance Woes as CFPB Rules Loom
The Federal Reserve has a solution for credit unions concerned about proposed CFPB disclosure requirements that threaten their ability to offer remittances: provide international transfers through the Fed’s FedGlobal ACH service.
“We believe it’s important for credit unions to remain in business,” said Jorge Jimenez, director of FedGlobal ACH Payments. “I don’t see a scenario where any financial institution cannot offer an international transfer service and stay in business.”
The Fed’s service is already compliant with Dodd-Frank regulations, he said, and the Fed “will be ready” to comply with any new regulations currently under consideration.
According to Federal Reserve documents promoting the service, FedGlobal’s NACHA international ACH format facilitates compliance by allowing all the required data on the sender, the receiver, and intermediary financial institutions to travel with the payment end-to-end.
“So, my message to credit unions is, ‘Let’s not panic’,” Jimenez said.
He added that FedGlobal is inexpensive compared with other international transfer providers. For example, transfers to Mexico through the Fed, marketed under the Directo a México brand, cost the recipient only 67 cents each.
Additionally, the Mexican Consulate promotes the program through an agreement with Mexico’s central bank, so credit unions may gain members stateside who are referred to participating institutions by relatives back home.