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The industry has asked the CFPB to delay the effective date for a rule expanding disclosures for remittance transfers.
November 2 -
The Consumer Financial Protection Bureau said Tuesday that institutions with fewer than 100 remittances a year are exempt from a requirement that providers of international money transfers provide upfront fee disclosures.
August 7
The Federal Home Loan Bank of New York announced Tuesday that it would stop processing international wire transfers as a result of a new rule from the Consumer Financial Protection Bureau.
The agency finalized a rule in January that significantly expanded required disclosures for remittances and revised it in August to exempt institutions with fewer than 100 remittances a year.
But many small banks have continued to argue the rule is unworkable, saying that the disclosures are too burdensome.
While not a community bank, the New York Home Loan Bank clearly agrees.
"It's all these disclosures that we would have to do," said Al DelliBovi, the president of the bank, in an interview. "This is not a core part of our business, we did it as a convenience."
DelliBovi said the business generated just $60,000 in revenue last year, and estimated he would have to spend $250,000 to deal with the added disclosures. (The New York Home Loan Bank made roughly $300 million last year and generated $425 million in revenue.)
The bank processed nearly 2800 remittances last year and roughly 2700 so far this year. It plans to stop at the end of the year before the CFPB rule takes effect in February.
DelliBovi said he had not contacted the CFPB about the issue, but decided it didn't make economic sense to stay in the business.
"For us, it's like a sideline business," he said. "Our business is to provide liquidity to our members and we can do that without sending wires overseas."
