Amended Dodd Frank Section 1073 effective October 2013

Following industry consultation, the US CFPB (Consumer Financial Protection Bureau) has issued the awaited amendments to Dodd Frank Section 1073. The new 2013 Final Rule is effective from October 28, 2013.

The three issues of greatest concern to US banks have been amended:

1. It is optional, in certain circumstances, to disclose fees imposed by a designated recipient’s institution.
2. The requirement to disclose taxes collected by a person other than the remittance transfer provider is optional.
3. the error resolution provisions that apply when a remittance transfer is not delivered to a designated recipient because the sender provided incorrect or insufficient information, and, in particular, when a sender provides an incorrect account number or recipient institution identifier that results in the transferred funds being deposited in the wrong account.

In addition, the CFPB has issued a list of ‘safe harbour’ countries which qualify for an exception in the rule, permitting estimated disclosure of certain figures in lieu of disclosure of exact amounts where the laws of the recipient country do not permit determination of the exact amounts. Currently these are, Aruba, Brazil, China, Ethiopia and Libya, and are subject to change.

Many US banks have been awaiting these changes, prior to committing project resource. No doubt US consumers, who might have been hoping for the benefits to be available from February 2013 – the original effective date – will welcome the improved predictability and transparency of their cross border payments. US corporates will also expect the benefits, and regulators in other countries are following closely.